Posts

The French retail group Carrefour presents itself as a fighter against hidden and unjustified price increases from a trade perspective. Products are currently being marked in its markets that cost the same with less content.

Retail Group Carrefour Practices Pricing Fairness and Takes a Stand Against Shrinkflation

/in /by

The French retail group Carrefour presents itself as a fighter against hidden and unjustified price increases from a trade perspective. As reported by the food newspaper, products are currently being marked in its markets that cost the same with less content – this is then referred to as shrinkflation.

The retailer is therefore labeling a number of relevant foods with stickers that warn consumers of the hidden price increases. This once again shows that the trade is ready to confront the manufacturers and at the same time strives to present itself as an advocate of consumers.

“A similar direction was recently taken by the Penny campaign with the headline ‘The true costs’, in which a few products were given significantly higher prices for a limited time to express the hidden and indirect environmental costs. A remarkable approach to achieve media attention”, says Professor Hans-Christian Riekhof.

Links:

Read the full article in the food newspaper here (subscription):
https://www.lebensmittelzeitung.net/handel/nachrichten/preisstreit-carrefour-warnt-vor-versteckten-preiserhoehungen-173339

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. What is behind this anchor price strategy?

Pilot Project at Penny: Do Anchor Prices Work for Groceries?

/in /by

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