Price Intelligence: Grocery Retailers Embrace £1 Pricing Strategy

UK supermarkets are offering £1 and £2 deals to encourage customers to spend more.

Supermarkets such as Tesco, Asda and Sainsbury's are pricing around one in six products at £1 or £2 and using red stickers that indicate a bargain, according to independent consumer body Which?

Which? shopping expert Matt Clear said that not all £1 items are a good deal and a £1 label "doesn't automatically mean it's worth as much as a pound". He added that comparing prices between supermarkets to "make sure you're getting the best deal" was still the smartest way to shop.

Sainsbury's is running such offers, especially in Sainsbury's Local stores; its rival Tesco is running the pricing tests in particular areas of stores.

Which? research recently revealed tactics that supermarkets use to make offers look attractive e.g. multibuys that were actually more expensive per item when running the offer, items on offer for longer than they were at the original price etc.

The company is calling on supermarkets to show clearer unit pricing - i.e. price by weight, volume or unit; this will make it easier for shoppers to carry out price comparisons across retailers.

© Profitero 2012

About Profitero

Pricing intelligence company Profitero works with retailers and manufacturers to help them increase sales and maximise their profits by using competitor price, promotions and stock information at scale. For more information on Profitero price intelligence and competitor monitoring, visit www.profitero.com or email sales@profitero.com.

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