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Asda pricing trick

27/08/10

  12:45:10 am, by Value hunter   , 428 words  
Categories: Marketing tricks, Asda

Asda pricing trick

A demonstration in how people face an impossible battle, when it comes to supermarket pricing. This example is courtesy of Asda (To be fair, it could be any one of the big supermarkets).

Product - Little angels cotton wool pleats (Asda own brand, there are no other brands or packs available).

On sale in the baby aisle last week (Have been for months), for 87p, a 200g pack - 43.5 pence per 100g
This week, price is now £1.47 for a 300g pack. (These replace the 200g pack) - now 49 pence per 100g (This is a 5.5 pence per 100g INCREASE in price - 15.5 pence per 300g pack)
This is a 12.6% increase in price! (Inflation rate is supposed to be around 3.5%) This increase in price is almost 4 times the rate of inflation!
A mother buying one pack per week, to wash and clean her baby (so it is plausable) will be spending £7.75 extra a year (Based on 50 weeks @ 15.5 pence extra Asda put on the price)

Asda offer put on at the same time as the new higher price: "Buy two for £2.00" - your receipt at the bottom shows that "You have saved - 94p" - Not true, you have actually only saved 61p (6 x 100g @ 43.5p - before Asda increased the price per 100g)

With the offer, the cost to Asda per 100g is 33.3p - however the customer is now forced to purchase 300g per pack (instead of 200g) clearing more product for Asda. I'd guess that 33.3p per 100g more than covers Asda's overheads and costs on this product?

Once this offer ends, the customer - in this case most likely to be a mother with a baby or toddler - if they shop at Asda, are forced into paying an extra £7.75 each year and buying an extra 5kg of product!

All shops do this with their prices?
Maybe, but for every 129 customers, out of the thousands that walk through Asda's doors everyday, that buy the cotton pleats - that's an EXTRA £1000 in Asda's profits, off just one single product line.
How many thousands of products does your local Asda store stock?
£7.75 could currently give me one month of broadband access, almost cover a months TV license, it would cover a full week's milk bill, etc.
If Asda manage to do this with 10 products that I buy regularly, that would be the equivalent of one weeks shopping, for a family of four!
Local shops do not advertise that they are, "Saving You Money Every Day!"

Asda, as with other supermarkets, should place an asterix * after each of their slogans - in this case the * would mean... *unless you have a baby or a toddler!

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