Pricing Strategy in Retail

Case Study:

Pricing Strategy in Retail

Development of a new pricing strategy for a 'Big 4' Grocer, based on competitor analysis...

Client

Major UK Grocer

Issue

Development of pricing strategy for Convenience store format

Approach

Board-level pressure was forcing our client's Convenience business to reduce prices - the Convenience business wished to take an alternative route, but required evidence to protect higher price points
We conducted internal, competitor and customer analysis to directly inform the development of an alternative strategy in line with competitor pricing and customer price perceptions
Competitor research included price benchmarking between the client and three competitors, across different store formats and geographies
Customer research included an exit survey (n = 1,000) and 6 focus groups, analysing perceptions of pricing by our client and its competitors

Results

We compared actual prices with customers' perceived prices, and mapped out the true price differentials between different competitor store formats
This clearly demonstrated that our client did not need to decrease prices - the real challenge was changing customer price perceptions using other means