Retail Pricing Strategy

Pricing Strategy : Retailers use two basic retail pricing strategies: high/low pricing and everyday low pricing (EDLP). Besides, there two basic retail pricing strategies, there are also other pricing strategies.

(1)     High/Low Pricing : Retailers using a high/low pricing strategy frequently – often weekly-discount the initial prices for merchandise through frequent sales promotions. The sales undertaken by retailers have become more intense in recent years. In the past, fashion retailers would mark down merchandise at the end of a season. Grocery and drugstores would have sales only when their vendors offered them special prices or when they were overstocked. Today, many retailers respond to increased competition and more value – conscious customers by increasing the frequency of sales.

(2)     Everyday Low Pricing (EDLP) : Many retailers, particularly supermarkets, home improvement centers and discount stores have adopted in everyday-low-pricing (EDLP) strategy. This strategy emphasizes the continuity of retail prices at a level somewhere between the regular nonsale price and the deep – discount sale price of high/ low retailers. Although EDLP retailers embrace their consistent pricing strategy, they occasionally have sales, just not as frequently as their high/low competitors.