Food Wholesaling and Retailing Part E AGEC 364

Pricing Complex process multi-product sellers with considerable pricing flexibility set prices to differentiate their stores from competitors

Importance of Pricing Food retail pricing impacts farmers and consumers Through food pricing and promotional policies, food retailers influence consumer demand, farm prices, and the movement of farm products

Pricing Strategies Market basket pricing Variable price merchandising “Every-day low pricing”

Market Basket Pricing Provides retailer with considerable flexibility in pricing individual food items Total dollar sales must cover expenses, but they do not have to follow wholesale or farm prices May have low dairy prices and make up with higher meat prices

Variable Pricing Use temporary, selective price cuts to differentiate their store from competition and attract customers Loss leader or weekend sales circular Example: 20% of all food items are priced at or below cost

Everyday Low Prices Competitive prices with other retailers. Do not focus on sales. Can meet competitors prices. Walmart is example.