BACK IN THE [CLASSICAL GREEK] DAY AESOP OUTLINED THE IDEAL APPROACH WHEN COMPETING IN A RACE; CONSISTENCY AND PERSEVERANCE ARE BETTER TRAITS THAN OVER-CONFIDENCE AND LAZINESS.
Two and a half millennia on and the Office of Fair Trading have adopted a similar approach when investigating the way prices are displayed, advertised and promoted in supermarkets. The OFT have drawn up a set of principles, which nearly all the supermarkets have agreed to adopt, in order to reduce so-called yo-yo pricing.
Yo-yo pricing occurs when a supermarket increases the price of a product for a limited period in a few stores (say from 60p to 90p), then standardises the price in all stores back at 60p. To shoppers in the majority of stores the price stays the same throughout, but the accompanying promotion (“Was 90p, now 60p”) makes them think they are suddenly getting a bargain.
Clive Maxwell, OFT Chief Executive, said that “Shoppers should be able to trust that special offers and promotions really are bargains”, a point echoed by Richard Lloyd, executive director of consumer group Which?, who said “it’s unacceptable that shoppers are confused into thinking that they’re getting a good deal when that might not be the case”.
We completely agree because a consistent approach to pricing that respects the relationship with our customers is at the heart of what we do. Saying that we won’t be beaten on price may not grab the eye as much as a ‘special promotion’, but in the long run we believe it’s the approach that will help us win the race.
BBC (30 November 2012) Supermarkets agree to end ‘yo-yo pricing’ with new code [online]http://www.bbc.co.uk/news/business-20543107 (Accessed 24 December 2012)