This is an excerpt of the latest Grocery Insight newsletter which covers the UK food retail market extensively, with 2/3 emails per week sent out to subscribers. There is rich insight, numerous images (c.12/13 today) and a real closeness to the market and the activity of the retailers.
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Following on from the Poundworld note, where they’ve gone towards to a multi price strategy, with their Poundworld Plus format. Poundland have recently added a range near the doorway, providing further value and presumably a fight back against the likes of Home Bargains and B&M who aren’t restricted by the single price point.
The Poundland version of multi price looks and feels better to the customer and could almost become an Asda style with £1/ £2 / £3 price points with a focus on providing value within that framework.
Of course single price remains crucially important to both of the single price retailers, but multiple pricing is becoming the norm and the need to diversify the offer, provide value and not land lock themselves against retailers without the price restrictions.
So the OMG! offering at the front of store features leading branded lines fixed at £2.
It’s effective in a sense of the range being in one area – a la the ‘bargain buys’ area in Home Bargains and also B&M, who operate a similar ‘spot deals’ space in the doorway.
However Poundworld intersperse their multi price lines all over the store, within host category and then in the bargain wall too. It didn’t work from what I saw, confused matters and I felt it was an opportunity missed.
But Poundland feel sharper; not affecting the core price point / message and also enabling bigger packs to be sold at a higher fixed price. £2 is a decent price point and customers understanding the value proposition will see that 750g packs of Cornflakes represent good value.
In addition, there’s no ‘extra value’ packs to confuse the value mechanic. It’s all core pack sizes at £2, enhancing the value based, round pound model.
More follows for subscribers with another 10/11 images and further insight and analysis on the chain and their prospects, opportunities and observations.