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  • Jul 11, 2014
  • Updated: 8:03pm
Wealth Blog
PUBLISHED : Tuesday, 10 September, 2013, 10:26am
UPDATED : Wednesday, 11 September, 2013, 5:36pm

The M&S knicker rip-off

I admit it. I buy my underwear at Marks & Spencer. Always have done, whether in Hong Kong or England, because they are good quality and don’t fall to bits after two machine washes. Unless you have time to scour the Wan Chai outlet shops, there’s actually not much alternative in Hong Kong. Normally, I give little thought to the price, because it’s good old M&S, isn’t it? They would never take advantage of their loyal customers. Well that’s what you’d think.

Nasty surprise

So, after HSBC finally decided to give me some of my own money, I went shopping last week in M&S in Taunton, south west England, and headed back to Hong Kong loaded up with supplies of socks, tights and knickers. 

The packs of five knickers cost pounds 12 and 7 respectively, the socks pounds 4 for five pairs, and the tights pounds 5 for a three-pair pack. 

Wandering through M&S in Central a few days later I spotted the same five-pack of knickers, the “low rise shorts” with lace top. The ones that cost pounds 12 in England. They were HK$329, or pounds 27. (dividing by 12) It must be a mistake. But no, the other five-pair pack that set me back a modest pounds 7 in Taunton was a whopping HK$259 or pounds 21.57 in M&S here. Three times the price! The English ones had been made in Cambodia and Bangladesh, the Hong Kong ones in Sri Lanka and India. The English ones had actually travelled further to the shop.

No golden gussets

I checked the three-packs of 15 denier tights, which had been pounds 5 in the UK: HK$129 here. That’s pounds 10.75. Ditto the socks – they were not totally identical, because the cotton/polyester mix was a slightly different proportion, but my pounds 4 five pack of socks was HK$129 here. Both lots of socks were made in China. So my bill for these four items in England was pounds 28, as against HK$846 or pounds 70.50, had I been silly enough to get them here. From 28 pounds to pounds 70.50. I looked at them again, no gold threads in the gusset.

I got home and looked at the M&S website, which claims to deliver to Hong Kong. There were similar knickers on sale at pounds 1.50 per pair or pounds 5 for a pack of four. That’s even cheaper than in their UK store.

So, time to speak to M&S about their great knicker rip-off. Our pricing does vary by product and range, the spokesperson told me. No kidding. She muttered about well maybe they were made in different places and had further to travel and that rents and overheads were higher in Hong Kong and that they tried to be in line with local pricing in their different regions. 

She emailed an on-the- record statement: "M&S is competitively priced within Hong Kong, which we review regularly. When setting our prices, we, like any other business, have to take into consideration factors specific only to the Hong Kong market such as higher rental and operational costs so it would be misleading to compare these to UK prices."

Misleading, indeed. I am not going to say anything more, I’m just thinking how monumentally irritated I would feel had I waited to stock up on my M&S undies here. No matter what they say, I would be feeling massively ripped off. But I do see a business opportunity: fill empty suitcase with pounds seven knickers on next trip, come back and resell to Hong Kong friends at double and they will still saved a third on the pounds 21.67 they cost in the shop here. 

Anna.fenton@scmp.com

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This article is now closed to comments

impala
You do realise that the rent M&S pays in Hong Kong is probably a hundred times higher than what they pay in Taunton, right? Or even if you take M&S in the UK as a whole, their average rent per square foot must still be much lower than what they pay on average in Hong Kong.

I am sure you are aware that books in Hong Kong easily cost 30~40% more than they do in bookstores in the UK, the US or even just in Taiwan. A standard pair of jeans from the GAP retails for USD 49.95 (HKD 388) online (so no VAT) in the US. In Hong Kong, the same pair costs HKD 550. That is 41% more.

Or take Zara. In the UK, a randomly selected black 'V-neck' dress costs GBP 35.99, but that includes 20% VAT. The net-of-tax price Zara receives is actually GBP 29.99, or HKD 368. In Hong Kong, exactly the same dress retails at HKD 499. That is 35% more.

We can go on and on with this, but you will find that after disregarding sales tax (which is not revenue for the retailer, it goes straight to the government), retail prices in Hong Kong are pretty consistently 30~50% higher. And the reason is simply that, despite murderous competition in retail, they have to be for a business like M&S to be commercially viable here.

And like you observed, it is not because they have higher logistics costs. It is purely retail rents that make up a completely out of whack (compared to elsewhere) percentage of expenses here. You can thank the tycoons and the developers for that (and the tourists of course).
 
 
 
 
 

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