Magazine article Marketing

Supermarket Jury Still out on Price Verdict

Magazine article Marketing

Supermarket Jury Still out on Price Verdict

Article excerpt

Every Day Low Pricing strategies have been embraced by a number of retailers. Alison Martin reports on recent specialist brand research

In view of the battering the major supermarkets have had from politicians and the media under the slogan of 'Rip-off Britain', it is scarcely surprising that the question of pricing has gone to the top of their agenda. This helps to explain the attractions to supermarkets of the new marketing technique, Every Day Low Pricing (EDLP).

In principle, the benefits are clear. Instead of the vast number of in-store promotions, which boost sales but confuse the public about price levels, EDLP promises to maintain transparent low prices.

EDLP supporters argue that the benefits are not cosmetic. The expectation is that shoppers' loyalty would be cemented as consumers take for granted that their store always offers the goods they want at the most competitive price.

EDLP was launched in the UK in August 1999, when Asda unveiled its 'Biggest Rollback Yet' campaign, promising permanent price cuts on a large number of leading brands. This was followed by Tesco's 'We Sell for Less' campaign.

Taylor Nelson Sofres Superpanel has compiled results of FMCG sales for the first nine months of EDLP. The division held a seminar last week to discuss with clients the implications of EDLP, both for the groups that have embraced it (Asda and Tesco) and the sceptics (Sainsbury's and Safeway).

It is not surprising that the two retail groups keenest on EDLP, Asda and Tesco, have reduced prices on a high proportion of goods sold (69% and 66% respectively).

It is perhaps more surprising that Sainsbury's, which has publicly denied following the EDLP route, has reduced prices on 60% of its volume sales. Even Safeway, which is firmly wedded to a promotional strategy, has cut on 41%. …

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