Pilot Project at Penny: Do Anchor Prices Work for Groceries?
What is the real cost of food when all costs are included in the price? The grocery discounter Penny has now calculated the “true” prices of food and compares them directly with the previous prices. These include costs caused by over-fertilization, loss of biodiversity, and greenhouse gases.
The news was quickly picked up by the media. For example, the Süddeutsche Zeitung reports on the pilot project of the discounter in Berlin Spandau, where a so-called sustainability market has been opened. There, a second price is displayed next to the regular sales price on the supermarket shelf. According to the retailer, this is based on the “true costs”, on the calculation of the “True-Cost-Approach”, explains Stefan Magel, manager of the Rewe Group, to which Penny belongs.
Meat would be three times as expensive
For consumers, the newly calculated prices are probably not very pleasing. Normal minced meat, for example, would be almost three times as expensive, organic minced meat would be more than double. A liter of simple H-milk would be 1.75 euros instead of just 79 cents. Organic fresh milk would then cost 1.84 euros instead of the previous 1.09 euros.
“True” Prices at Penny as Anchor Price Strategy
Pricing expert Prof. Dr. Hans-Christian Riekhof from UNICconsult with expertise in retail sees this first attempt of its kind in retail as an anchor price strategy. “Our Pricing Newsletter readers know, why anchor prices should be set and how they work in the consumer’s psyche. Nothing else is the attempt by Penny from a psychological point of view to display the true costs of food on the shelf. These true costs include all ecological damages not included in the shelf price – economists would speak of external effects.”
Whether this type of anchor prices will work for consumers will show, says Riekhof. That politicians see a need for action here is probably rather unlikely. In any case, one can only congratulate Stefan Magel on this concept – a courageous step.
To the article in the SZ:
https://www.sueddeutsche.de/wirtschaft/einzelhandel-fleisch-dreimal-so-teuer-1.5017005
More about anchor prices and their psychological effect on consumers:
https://www.unicconsult.com/pricing-newsletter-no-27-2019-was-sind-ankerpreise/
Photo:
StockSnap, pixabay.com
