WHEN IS EVERYDAY LOW PRICE THE SOLUTION?

The Australian grocery sector is currently battling through a low growth environment. Adding to the challenge, the industry is losing up to as much as $11.3 billion in unnecessary promotional activity.
Optimising your pricing strategy is one way your brand can still grow under these testing conditions. It is critical to have a deep understanding of which items in your portfolio are best suited to a High-Low pricing strategy and which ones would benefit from Everyday Low Price (EDLP).
Nielsen Everyday Pricing Analytics recently conducted an audit and identified 960 items with EDLP applied in Woolworths and Coles in 2017 versus 2016. This information was then analysed to uncover the exact impact that the EDLP strategy had on those particular items.
The results showed that overall, EDLP had driven positive results for both brands and retailers by growing baseline volume growth for these products; while an increase in the weighted price worked to improve dollar sales. On average, EDLP items grew at 5.9% annually – well above the FMCG grocery sector rate of 1-3%. The analysis revealed that there are certain common characteristics associated with the most successful products under an EDLP regime. EDLP, however, is not a one-size-fits all approach. Nielsen – Read more…