Cosmetics chain sparks toothpaste price war
Customers at dm cosmetics shops across Germany have been caught up in a toothpaste price war, after the shops announced they would "strike" over Colgate's decision to sell smaller packages for the same price.
Head for the toothpaste aisle in any dm shop looking for Dentagard and you'll find a little empty spot on the shelf with a note.
"Same price for less contents: we're striking against that! dm."
The chain says that it's fighting for its customers' interests after Colgate-Palmolive, the producer of Dentagard, decided to start selling the product in 75 ml tubes rather than 100 ml – but to keep charging the same price.
dm chairman Erich Harsch said on Tuesday that "we don't want to pass this price increase on to our customers."
But a Colgate-Palmolive statement insisted that the multinational would not back down.
"As a producer of consumer goods, it's a normal practice to match the retail prices to increased costs, for example for energy and raw materials," the company said in a statement.
"It's not usual to talk publicly about our dealings with our retail partners," the company sniffed.
Armin Valet of Hamburg's Consumer Rights Centre (Verbraucherzentrale) welcomed the dm move, saying that customers often feel exploited by producers' hidden price rises.
"We are not unhappy at all with the fact that a retailer is taking a stand," Valet said.
Cosmetics shops fear discounters
"The trick of reducing the contests without dropping prices is being used more and more often in retail," marketing expert Martin Fassnacht of the WHU business school said.
"But it's new for a retailer to explicitly draw attention to the fact that a producer is making the cost/benefit relationship worse."
Fassnacht said that dm's move could improve its image as an honest business and put pressure on Colgate-Palmolive – not to mention make the chain's own-brand Dontodent toothpaste look more attractive.
In fact, dm's move against Colgate may be prompted by fears of discount supermarket Aldi, which is adding more and more cosmetics products to its ranges and undermining prices.
"Not only classical supermarkets, but also the cosmetics chains have been worrying about [the discounters] for a long time," Fassnacht said.
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Head for the toothpaste aisle in any dm shop looking for Dentagard and you'll find a little empty spot on the shelf with a note.
"Same price for less contents: we're striking against that! dm."
The chain says that it's fighting for its customers' interests after Colgate-Palmolive, the producer of Dentagard, decided to start selling the product in 75 ml tubes rather than 100 ml – but to keep charging the same price.
dm chairman Erich Harsch said on Tuesday that "we don't want to pass this price increase on to our customers."
But a Colgate-Palmolive statement insisted that the multinational would not back down.
"As a producer of consumer goods, it's a normal practice to match the retail prices to increased costs, for example for energy and raw materials," the company said in a statement.
"It's not usual to talk publicly about our dealings with our retail partners," the company sniffed.
Armin Valet of Hamburg's Consumer Rights Centre (Verbraucherzentrale) welcomed the dm move, saying that customers often feel exploited by producers' hidden price rises.
"We are not unhappy at all with the fact that a retailer is taking a stand," Valet said.
Cosmetics shops fear discounters
"The trick of reducing the contests without dropping prices is being used more and more often in retail," marketing expert Martin Fassnacht of the WHU business school said.
"But it's new for a retailer to explicitly draw attention to the fact that a producer is making the cost/benefit relationship worse."
Fassnacht said that dm's move could improve its image as an honest business and put pressure on Colgate-Palmolive – not to mention make the chain's own-brand Dontodent toothpaste look more attractive.
In fact, dm's move against Colgate may be prompted by fears of discount supermarket Aldi, which is adding more and more cosmetics products to its ranges and undermining prices.
"Not only classical supermarkets, but also the cosmetics chains have been worrying about [the discounters] for a long time," Fassnacht said.
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