How consumer habits are subject to the law of unintended consequences

Some time in the 1960s, a group of people in an advertising agency (among them Llewelyn Thomas, son of Dylan) found themselves debating the direction of causation in the purchase of electric drills. Their dispute revolved around one question: do men a) conceive a need for making a hole and therefore go and buy a drill or b) buy an electric drill in a shop because it looks cool and then wander around the house desperately looking for any excuse to make holes in things.

(One joy of working in advertising is that you get paid to have the kind of conversations when sober which other people are only allowed to have when drunk or stoned.)

Yet the question is not quite as silly as it sounds: your approach to selling drills would differ depending on which of these two theories is true. (I definitely lean towards the latter, Freudian explanation of drill purchase over the rationalist assumptions of the Chicago school.)

You could hold a similar debate about the recent problems of Tesco. Which way does the causation run? Do people do big weekly shops because they want to, or because that’s what you do when shops happen to be big?

The conventional explanation for the decline of Tesco (beloved of accountants, city analysts and other members of the economic autisto-cracy) holds that cheap shops such as Lidl and Aldi undercut Tesco’s prices and so people deserted Tesco to save money (yawn). A more interesting explanation takes a complex view of human behaviour. Since Tesco and every other grocery retailer expanded into lots of smaller locations, people found themselves surrounded by shops and started shopping in smaller batches. When you shop more frequently, your behaviour diversifies: instead of going to one mid-market megastore for a balance of price and quality, you vary your repertoire.