Chris Cowan

For the fresh produce market, developing a successful pricing strategy is the key to success. With almost two-fifths of produce shoppers concerned with managing their budget, the right price makes all the difference to whether a product goes into a shopper’s basket or is left on the shelf. Putting a price too high can deter hesitant shoppers from purchasing; too low and retailers miss out on the opportunity to maximise profit.

Over the past three years the average price of fresh produce has fallen by seven per cent. Undoubtedly the discounters have played a part in this, compelling the big four to lower prices in an attempt to stay attractive to customers.

Value ranges have also been redeveloped as supermarkets expand the number of cheaper products on offer. On the flip side, the growth of more expensive markets like berries has softened the impact of lower prices to some extent.

Over the past year, there were more fresh produce categories in growth than in decline, with 136 managing to increase sales compared to 98 that saw a drop. When it comes to increasing sales, we talk a lot about expandability – a shopper’s capacity to consume more of a product and then buy it again.

But for many, fruit and vegetables are staples not treats. Rather than driving extra sales, reducing prices has the potential to subsidise purchases which would have happened anyway – something which can be highly damaging to retailers and suppliers alike.

While lowering prices can encourage shoppers to buy, it also has the potential to damage the market. Getting it right when it comes to pricing strategies is imperative for success.