Shoppers at the shelf edge often have one nagging question. Can I get this same item cheaper at another store? If you are in a grocery store looking at branded products the answer is much more likely to be no. All of the big grocers have some form of price matching and now Waitrose has just announced: From today, our prices on branded grocery products are now identical to Tesco’s, excluding promotions.
Every day common pricing (EDCP)
EDCP is simpler for shoppers as there is less need for them to do their shopping in several different stores.
Grocery retailers have understood that in most cases there is little value they can add to branded products. Where they can add value is with own brand products and unique products that only they sell. To prove the point Sainsbury’s, Taste the Difference sales rose by 20% in the fourth quarter of last year while at Tesco, its value range is worth £1bn a year. Waitrose Essentials are also doing very well. The challenge for the grocers is to convince shoppers of the added value in their own brands.
Promotions are King
Grocers need to get through to shoppers that traditionally only buy brands and the way to do this is with smarter and faster changing promotions . But, getting beyond a given market share percentage will be tough. We have been having several interesting discussions with retailers on this point.
As well as own brand promotions there will also be an increase in the promotion of branded products because with EDCP the key marketing tool of normal price differentials is lost. There will be more promotions than ever but they will be different.
As a shopper I welcome EDCP taking away the nagging price question and of course the continued improvements to own brands. As a marketing person I’m looking forward to new and innovative promotions at the shelf edge and in a broader Omnichannel environment that are not all price driven.