ASDA Admit Selling At Loss

When masses of people start queuing at ASDA for a video game, there is something going on. FIFA 10 was among a number of titles being priced at almost  50% off RRP: an offer that drew in the crowds. The latest title to receive the same treatment was WWE Smackdown Vs Raw 2010, which was priced at £25 for the 360 version. Tesco were selling the PS3 version for the same cost.

A lot of people suspected foul-play and called the supermarket chain ‘bullies’. ASDA’s game-buying manager, Duncan Cross, has stated that they have been selling games at a loss. Their official line is that they are listening to customers and offering ‘value for money’.

ASDA’s reduced prices may only last for a weekend or so, but is this tactic having a detrimental effect on the industry? The Managing Director of Chips, whilst speaking to GI.biz, certainly thinks so. He has been more than vocal in his opinion of the supermarket, and their strategy, and has said that it is causing his business damage; not only in sales but also in the way they provide products.

It’s no longer just a situation of looking at a title, working out how good it is, working out what market it is, and then buying a quantity for your customer base. Now you’ve got to think, who’s going to trash the market, and if they trash the market what effect is it going to have on my stock holding?

Obviously Chips aren’t going to be the only people that this will damage. But I can’t help but think if ASDA, and other large supermarkets, start throwing their weight behind the games market in this way, sooner or later other retailers will stop stocking titles until they can compete on price. If they can’t compete, they lose business, they go under, and ASDA are left standing over the carcasses of once-great game chains; and what if they do become a lone physical retailer?

Sure, this is the worst case scenario, but it’s a scenario that’s not completely ridiculous. If every major game launch saw similar pricing tricks, it wouldn’t be long before they ruled the roost. Our choice as consumers will vanish and we will be at the mercy of how passionate these massive companies are. Then of course there is the price issue. If ASDA ever get to the stage whereby they become our only option, do you think prices would stay that low? I seriously doubt it.

Okay, so ASDA are a business. I understand that. But selling at a loss over the launch weekend? I’m no Rupert Murdoch, but that’s not good business! Duncan Cross concluded his defense of their strategy by saying:

…it would appear the majority of customers feel that ASDA (and indeed the other supermarkets) are offering terrific value for money when compared to other retailers…

You are selling at a loss! You are selling at 50% off RRP! You are offering value for money, I can’t say any different, but in my opinion what you are also doing is helping to push an already struggling industry into the ground – an industry that has millions of devoted fans and an industry that employs countless people.