Pricing Strategies In Today's Uk Market

The price war in today’s UK market seems to be an on going battle with no clear ending or winner. Retails is surely a fiercely competitive sector, but while the supermarkets are fighting, trying to beat each other, the customer perception of how cheap things really are in not going to change with a new barcode.

Recent studies show that the British are the worst in estimating the accurate price on products. This simple matter raises the question if the marketers are doing their job right and if their communicating the right type of information. Price perception has become a tricky affair since most retail supermarkets have been engaged in the price war so the customers get flooded with promotions and fail to understand what things really cost. Price positioning does not only have to do with brand positioning but also with the store’s sale’s strategy and business model.

Today’s UK market is flooded with price cuts because of the on going price war between the top retailers such as Tesco, Asda, Sainsbury’s, Waitrose and so on. The Brand Match, the Big Price Drop and other similar programs are methods used in attracting the British customers in supermarkets. The cut in prices will not have any profitable effects in the long run neither for the stores nor for the customers. When you choose to use such low prices you will actually start losing profit also, you will be adding more zeros on other products while you are cheapening the ones that are on promotion.

It is a carousel that seems to be out of control. The customers will pay less for products that they either don’t need or they will pay more for some things that are essential. The reduction of price will apply to single products therefore the 2 for 1 deals will disappear and in reality you will end up paying more for a single product than you would normally. At the rate things are going, households will not recover any time soon.

The fuel prices, the high costs of the utility bills and all other payments that a normal household has on a monthly basis has determined customers to be very careful with what they buy. Sometime’s peoples perception of cheap supermarkets can back fire on retailers that have pushed this strategy to the limit. When people associate cheap with low quality then you can be sure that your sale revenues are going from bad to worse. The perfect example is Waitrose which is considered to be more expensive than other supermarkets but because people associate higher prices with good quality their business is flourishing.

By: JacquelineBrewster

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