Recession resilient pricing: how to manage retail revenue as the market demands ever cheaper prices

The recession triggered by the pandemic will be unlike any the retail sector has ever seen, making it impossible to predict changes or navigate the climate on gut decisions alone.
The industry has an obligation to support customers during this difficult time and in order to do that, brand owners and retailers will need to make decisions that offer value for the shopper whilst not eroding profit. The good news is that there are tools, including data and granular level insights that point to smart choices.
Determining what drives the customer perception of value is a good place to start.
It’s imperative to tailor the value equation by knowing which products are not truly sensitive to pricing, and the trade-offs shoppers will make among those that are.

In the UK, Tesco has been the first retailer to openly respond to an anticipated need for cheaper products, launching a campaign with a strong everyday low pricing message to defend against the continued threat from the discount supermarkets. The retailer has asked brands and suppliers to join its price match campaign to support customers seeking promotions and value during the recession.
Tesco’s approach may be widely publicised, but there has been a consistent pressure towards EDLP and reducing promotions in recent times through similar strategies at other retailers. We have every reason to believe that all brands will have to address their value strategy as the pressure to support lower prices will likely increase.


For those suppliers who haven’t yet planned a review of their pricing architecture, there is still time to act. Download our latest whitepaper to learn more about how to develop a recession proof value strategy.

IRI advises brands and retailers on a breadth of solutions such as pricing strategy, promotional mix as well as ranging decisions. Contact us to discuss how we can help at Marketing.INTL@IRIworldwide.com

Recession resilient pricing: how to manage retail revenue as the market demands ever cheaper prices

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