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Supermarkets replicating pound shop pricing

More than one-in-six products being sold in supermarkets are now priced at exactly £1 or £2, highlighting how the pound shop revolution has started to affect long established rivals.

Supermarkets, and also chemist chains, have started to rely on distinctive red stickers, and very clear £1 or £2 prices in a bid to attract shoppers on a budget, as well as those consumers fed up trying to work out complex deals. One-in-four of all products sold by Asda is now either £1 or £2.

Some 16pc of items sold at Tesco, Asda and Sainsbury's are priced at either £1 or at £2, according to figures supplied by mysupermarket, the comparison site.

Sainsbury's is particularly reliant on these eye-catching products in its Local shops, while Tesco is testing out separate areas of its shops stocked with just £1 products – effectively a rival to Poundland and 99p Stores.

Bryan Roberts, retail analyst at Kantar, said: "It does herald something of a change for the industry. It was established philosophy that if you wanted to show what good value it was you priced it at 99p. And that's why Walmart, who always take it one step further, priced everything at 96c or 97c.

"What we've seen in recent years has been a drive for clarity and simplicity in the offers, in part spurred on by the pound shops."

Pound shops, most privately owned, have been one of the few successes on the high street in the past couple of years, with many of them filling vacant sites left from the collapse of Woolworths. They have tapped into consumers' desire to save money and figures show there has been a 14.2pc rise in the number of pound shops in the past year.

One of the most successful supermarket chains has been Iceland, where the majority of goods are priced at either £1, £2, £3 or at 50p intervals.

Source : Harry Wallopp – The Telegraph

06 June 2012
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