Kevin Harrington // marketing // blog

Ignore sales promotions, put your prices up and most customers probably don’t care…assuming they notice.

The “big four” of supermarkets, Asda, Tesco, Morrisons and Sainsbury’s, have increased the number of £1 promotional price tags 150% over the past year. This compared with a 6% increase in their general promotions, according to a report compiled on behalf of industry magazine the Grocer.

Source: BBC Magazine

The above article is an extract from an article about the rounding up of prices from 99p to £1. Do the maths: what might that equate to in increased annual profits? Simple and effective; this is a great example of pricing being used correctly in the marketing mix.

From FT.com today:

According to the British Retail Consortium survey, retail sales rose by just 0.1 per cent year-on-year, suggesting that the pick-up in demand seen in January was a “discount-driven blip”, according to Stephen Robertson, director general.

As I said in December, the underlying profits are the key issue.

The official figures have come as something of a surprise - UK retail sales rose unexpectedly last month, official figures have shown.

Total sales volumes climbed 0.3% in November from the previous month, the Office for National Statistics said. Sales were up 1.5% from a year ago.

See the BBC News website for the full story.

I think the big issue not addressed in this feature is profit margins. Given the high level of discounting many retailers will be reporting very low profits.