Price is the big issue on everyone’s mind these days - but are we really doing the right thing in cutting everything to the bone?
It’s easy for everyone to panic when the word ’recession’ is plastered everywhere across the media. Yet there are lessons from the past that should make us all cautious about how we react.
The pizza industry was on a high - growing dramatically - when the 1990s recession hit. Like now, the panic response by many was to cut prices and offer deals. Pizzaland, in particular, ran a promotion ’Buy one pizza and get another for 1p’. But the consequence of this was that the deals undermined the consumer’s value perception of pizza.
Clearly, we all need to be aware of consumer spending and we need to recognise that some people have less disposable income than they did. However we have to be careful that, in the battle to survive, we do not simply succeed in undermining the consumer’s perceived value of a sandwich.
Vast swathes of cheap sandwiches in chiller cabinets could be very damaging to the long-term image of commercially made sandwiches and not everyone is looking for a deal anyway. While it may be necessary to include some lower-cost options in ranges, let’s not over-play it - the consequences are not only less margin and revenue for retailers, but also damage to our relationship with consumers.
There is much evidence to suggest that many consumers will continue to pay reasonable prices for sandwiches, provided they feel they are getting value for money. Let’s not shoot ourselves in the foot.
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