Convenience store retail pricing strategies
Our client was looking to develop its internal pricing capabilities through price testing and price optimisation techniques.
We conducted market research to understand customer price and value perception of our client and key competitors. We then conducted a 3-month price test to understand price elasticities in each product category and subsequent analysis revealed significant opportunities for margin improvement. Scenario modelling and threshold analysis using inputs from the price test was used to deliver a price optimisation plan which defined how item-level prices should be set.
Price changes implemented resulted in a normal margin improvement of 6.3%*. *Using results from 3 months into the price change