Of the lines where we can control the retail price and profit margin, one of the key questions we need to answer is: “what is the right price?”. Clearly, the way that top sellers are priced can – and does – affect the bottom line more than any other products. Take your milk prices, for example.
Milk is our best selling category and in the 13 years that we have been stocking the product we have led on price. Our milk prices are in fact cheaper than Tesco at the moment, as we are benefiting from the centrally delivered cost price that Musgrave Retail Partners UK offer. We are making over 35% on the category, selling at the Londis-recommended price, but could we make more? And how sensitive are our customers to price with their buying decisions?
Certainly not a simple problem to resolve, but one that is potentially worth a reasonable reward if we get the balance between price and volume right. I will report back on what I discover.