Retail Pricing

Abstract

The topic of retail prices and price policies followed by retailers is important for two reasons: first, retail prices are important to the consumer since these prices affect what the buyer can purchase with his dollars; second, retailing historically has been a barometer of economic health.

One of the myths of retailing is that a customer’s major reason for buying is price. Each retailer has a ‘selling proposition’. That’s the sum of all the parts that lead to the ultimate sale, for example, pre-sale advertising, the customer visiting the store, and after-sale service. These add up to value perceived — the richness of the shopping experience. Price is part of the equation, but not the total factor.

(Clark A. Johnson, in Arthur Anderson, Retailing Issues Letter, vol. 6 (September 1993) p. 3)