UK supermarkets giving up on a trick of the trade?

  • September 22, 2009
  • Daniel Palmer

A new study from the UK has suggested that British supermarkets are more often rounding up their prices to the nearest pound, breaking away from one of the traditional tricks of the trade.

Price comparison website mySupermarket.co.uk researched prices at the leading UK grocery chains and discovered that rounding up to the nearest pound or 50 pence was becoming commonplace. For example, a small packet of tuna pate at Sainsbury’s rose from 99 pence to £1 between 2008 and 2009, while half a dozen large free-range eggs at Asda increased to £2 from £1.99.

“While shoppers are drawn in by eye-catching ‘only £1′ signs, they should be aware that only 12 per cent of £1 items are cheaper than previously,”Jonny Steel, a spokesman for mySupermarket.co.uk, said.

One could surmise that it is a simple strategy to boost profit, as one pence might seem trivial to customers but could add considerably to the bottom line of a retailers with thousands of customers every day. Even so, the strategy flies in the face of the old trick of the trade – using prices like £1.99 or $4.99 so that the products seem cheaper. Research has suggested that consumers do in fact perceive prices of say $4.99 as being noticeably better than $5 yet hardly any different from say $4.95. In fact, a French study last year discovered that decreasing the price of a pizza from €8 to €7.99 helped lift sales by 15 per cent.

The supermarkets gave mixed responses, with some suggesting it was purely coincidental and others claiming it was to make prices more “transparent” for customers and had been well received.


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