Tending Toward the Middle
It seems appropriate in today's flagging economy to revisit pricing themes. Consumer concern with take-home savings has only increased since the soaring economic times of the 1990s. The lead story on July 14, 1997, was the blurring of differences between everyday-low pricing and a high-low operating strategy.
As high-low stores became less high and EDLPs relied more and more on promotional sales and specials to generate consumer interest, the two strategies, according to industry observers, were not as different as they had once been. Consumers respond to take-home savings, sources said, meaning that the low price the EDLP operator offered and the take-home price after using a tool like a loyalty card was evening out in the consumer's pocket.
The format of the day, SN pointed out, was high regular shelf prices with low-priced advertised specials, a promotions-oriented, high-low pricing format. Predictions that EDLP would again have its day may ring true in the current economy as some retailers again move in that direction. Most notable was Wegmans' move to EDLP for thousands of items earlier this year. Promotions may still play a part, irrespective of the operating model employed by a store, but tangible savings still sway the average consumer.
