Business Irish

Sunday 24 September 2017

Bargain shops lead the way on pricing

The major supermarkets are dropping the '€1.99' model in favour of 'round euro' formats, writes Roisin Burke

IT'S one of the biggest changes to hit retail in about 30 years. The '1.99' pricing model is dying.

Swayed by Eurogiant and other bargain stores that use clearer pricing, Tesco, Dunnes and SuperValu are swapping their '99 cent' labels for €1 and €2 price points instead, research by Kantar Worldpanel shows.

"'Round euro' priced goods now account for 12 per cent of grocery sales," said David Berry of retail researcher Kantar.

Back in 2008, it would have been just 3 per cent. "It is a format that's increasing in popularity," said Berry. "Use has more than doubled and it's a growing phenomenon," he added.

The change has been caused by the simple pricing used in the 'Everything for €2'-type shops that have mushroomed everywhere.

Tesco in particular has been using eye-catching red and yellow €1 and €2 point-of-sale signs promoting value buys in their stores.

"You will see quite a lot of promotions around €1 price points in Tesco, Dunnes and SuperValu on deals and big highlighted signage at ends of aisle," Berry said.

"The clarity of the offer is part of reason why it's appealing to the shopper, especially if you're on a strict budget. We feel that shoppers are looking to exert more control over what they're spending at the moment," David Berry explained.

Sunday Indo Business

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