That Time A Price War Meant Beans On Toast Cost Negative Money

That Time A Price War Meant Beans On Toast Cost Negative Money

One of the most wonderful aspects of bread is that it is both a versatile essential to every larder and also thanks to speciality bread suppliers a delightful luxury treat, particularly if used to make a similarly indulgent sandwich.

However, at a time when many people are focusing on their shopping list, there was a time when everyday essential items were so cheap, that a meal of beans on toast would actually make you a very tiny amount of money.

This mindbending contortion of all known laws of bread, beans and mathematics was the ludicrous result of a period in history economists call with a straight face “The Bean Wars”, although it affected bread and a wide range of other products.

In the early 1990s, the main supermarket chains in the UK, such as Sainsbury’s Asda, Kwik Save and Tesco, were concerned about a wave of budget supermarkets, including Netto, Aldi and Lidl.

These shops offered own-brand versions of everyday essentials such as beans and bread, which plummeted in price. Aldi started the ball rolling by pricing their own-brand beans at 9p a tin in 1994, then Netto responded with an 8p tin.

Kwik Save responded by selling 7p beans, with an initial limit of ten tins per customer (although this would eventually be reduced to four as the war raged on).

By 1996, this price had reduced to 5p across the board for the lowest priced tins of beans, until Tesco proudly announced that they were pricing their baked beans at 3p a tin, declaring victory in the price war.

However, almost immediately afterwards, Chris Sanders, owner of Sanders Superstore in Avon, sold beans for -2p, literally paying customers to take the beans off their hands and ending the price war once and for all.

This, alongside loaves of bread for less than 10p, meant that discounting the energy needed to cook everything, a breakfast of beans on toast could cost negative money to make.

Whilst it looked truly ridiculous to onlookers, the pricing strategy took advantage of the beans as a loss leader; they would make a loss on every tin they sold, but because they got people in the store, they would generally buy the rest of their shopping too, including luxury items that would make back the entire cost of the beans.

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By | 2022-07-04T16:07:07+00:00 June 20th, 2022|Blog|Comments Off on That Time A Price War Meant Beans On Toast Cost Negative Money

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