PRICE-MARKED packs have become hugely important to convenience stores but at least one major wholesaler reckons that new trends in manufacturers’ PMP pricing could lead to c-stores being seen by consumers as an expensive option.
Martin Race, group trading director for Bestway Wholesale told Scottish Grocer: “Consumers recognise and respond to good value in an independent store as much as any other. PMPs shout value to the consumers and Batleys is at the forefront of giving value to our customers.
“However as an industry we need to be careful. What we are seeing, and sadly it is increasing, is that price-marks are being used by manufacturers to convey the suggested retail price rather than as a tactical promotional tool.
“Recently we have seen two major manufacturers increase the price-mark from £1 to £1.29 without consultation of wholesalers or retailers. These products – that were massive sellers at £1 – are now selling a fraction of the volume as consumers can purchase them cheaper elsewhere.
“We are now at a crossroads in price-marking where over the years we have all seen the advantages to our relevant businesses. There is now the fear that price-marking in independents is no longer giving value in comparison to multiples and discounters, where £1 is the ubiquitous price.
The argument for price-marked packs is ‘reduced margins but more sales’. We are getting to a place where the dynamic is changing to ‘more margin but reduced sales’.
“Once you step over that elasticity of 10% between convenience and multiples in pricing, price-marks are no longer viable as consumers will vote with their feet and purchase from other channels,” he said.
• What do you think? Are manufacturers now using PMPs for standard pricing in c-stores and are prices being pitched too high in comparison to supermarkets and branded goods in discounters? Contact Patrick Duffy on 0141 567 6074 firstname.lastname@example.org