The seriousness of the financial troubles worldwide has determined many retailers to start a price war in order to attract more customers, make more sales and increase revenues. When you are in the retail business you might be tempted to start cutting your prices when your competitor does this. However, this sort of behavior will only lead to a war price that will be hard to get out of later on. This is precisely what is happening in UK today with some of the biggest retailers being trapped in the price war.
The only thing that it is clear by now is that the retailers have intensified their attacks on the prices, nevertheless it is still unclear who will be the one that will win from all of this. Programs such as the Big Price Drop, Brand Match and others that focus exclusively on cutting prices are not going to help increase margins and in the long run, they are not going to be beneficial for the customers also. If the price drops for some products for a longer period of time then you can be sure that it will actually determine an increase in the prices of other products. Retailers cannot sustain such price cuts without having a safety net.
The supermarkets have become extremely interested in attracting as many customers as possible since the economy is not recovering, the wages are still frozen in many sectors of the working environment and the high inflation has determined people to be much more careful with what they buy and how much they spend. The high fuel prices, the utility bills and the staggering inflation have determined some of the top UK retailers to engage in a price war that seems to be escalading.
The truth is that in the long run, the price war is definitely not doing anyone any good and it will actually diminish the profits altogether. The Indian summer that Britain has experienced this year has also affected the retailers. People were not interested in spending time in malls but rather spend time in the great outdoors and in parks. Customers can no longer afford to spend as much money as they used to, this is why retailers are not fighting tooth and nail to get the best priced on the market.
When we are talking about the battled of the prices we cannot be sure of the outcome. The supermarkets have not gained in profit margins, customers are paying less for items they don't buy on a daily basis but they are still paying more for the essentials.
The only thing that it is clear by now is that the retailers have intensified their attacks on the prices, nevertheless it is still unclear who will be the one that will win from all of this. Programs such as the Big Price Drop, Brand Match and others that focus exclusively on cutting prices are not going to help increase margins and in the long run, they are not going to be beneficial for the customers also. If the price drops for some products for a longer period of time then you can be sure that it will actually determine an increase in the prices of other products. Retailers cannot sustain such price cuts without having a safety net.
The supermarkets have become extremely interested in attracting as many customers as possible since the economy is not recovering, the wages are still frozen in many sectors of the working environment and the high inflation has determined people to be much more careful with what they buy and how much they spend. The high fuel prices, the utility bills and the staggering inflation have determined some of the top UK retailers to engage in a price war that seems to be escalading.
The truth is that in the long run, the price war is definitely not doing anyone any good and it will actually diminish the profits altogether. The Indian summer that Britain has experienced this year has also affected the retailers. People were not interested in spending time in malls but rather spend time in the great outdoors and in parks. Customers can no longer afford to spend as much money as they used to, this is why retailers are not fighting tooth and nail to get the best priced on the market.
When we are talking about the battled of the prices we cannot be sure of the outcome. The supermarkets have not gained in profit margins, customers are paying less for items they don't buy on a daily basis but they are still paying more for the essentials.
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You shouldn't fight today's sales wars with yesterday's pricing strategies; hire the best professionals to help you increase margins!
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