2011 - A chance for retailers to slip in some sneeky price rises?

The latest inflation figures for the UK economy don’t make very encouraging reading - particularly for households affected by wage freezes or reductions ahead in 2011.  But this article in Management Today suggests that prices may rise even faster in early 2011 for two related reasons - the increase in VAT to 20% and retailers looking to improve their gross profit margins whilst consumers are expecting price changes!  Its a sneeky, but understandable tactic. You can imagine the scenario - the customer comments that prices seem to be higher than before Christmas; the obvious response is to blame Osborne’s VAT rise and hope that the customer doesn’t (or can’t) do the mental maths to check the explanation!

There are some excellent evaluation points made in the article which students could use to assess whether this pricing tactic will work.  The retail market remains highly competitive and if some retailers don’t implement price rises then they may find customers are able to spot the emerging price differentials and switch their custom.  But if you’re out shopping in early Jan 2011, watch out - and take your iPhone calculator with you.

Revision Presentation - Marketing Mix: Introduction to Pricing [17 May 2012]
Same product - different prices: Greggs sausage roll costs more in Hammersmith than Hull [9 May 2012]
Marketing analysis: the UK supermarket battleground [3 May 2012]
Revision Presentation - Inflation [6 Apr 2012]
Inflation for Business Students [27 Mar 2012]
Economics for Business: Is an economic recovery underway? [28 Feb 2012]
Pricing and the consumer - a question of haggling? [10 Feb 2012]
Pricing - Daftest In Store Deals! [14 Dec 2011]
Marketing and the supermarket ‘price war’ [6 Dec 2011]
Empty Shelves at Sainsbury’s - You Decide! [27 Nov 2011]
The Rise and Fall and Rise of Gerald Ratner [27 Nov 2011]
Revision Quiz - Marketing: Pricing [1 Nov 2011]
The Business of Newcastle United [12 Oct 2011]
Product Life Cycle - The Blue Peter Annual [22 Sep 2011]
Pricing tactics - cheap flights (no feckin way) [22 Aug 2011]
Strategy Video - Innovation through technology at Fern Howard [10 Jun 2011]
Using Chucklevision to Teach Business [8 May 2011]
Discounters move into UK shopping malls [19 Apr 2011]
Is the role of inflation over inflated? [30 Mar 2011]
The UK Economy - Inflation (CPI) [13 Mar 2011]
The Profit Margin Bloodbath of UK Recession [6 Mar 2011]
Retail Meets Monopoly - A Business Lesson Cracker [5 Jan 2011]
Starter activity - percentage changes and the VAT rise [5 Jan 2011]
Q&A - How can a business use contribution pricing? [2 Jan 2011]
Q&A - What is competitor-based pricing? [2 Jan 2011]
Q&A - Why might a business use psychological pricing? [2 Jan 2011]
Q&A - What is predatory pricing? [2 Jan 2011]
Q&A - Outline what is meant by cost-based pricing [2 Jan 2011]
Q&A - Outline how market research can help a business set its prices [2 Jan 2011]
Q&A - Distinguish between price and cost [2 Jan 2011]
Q&A - Should a business use a “loss leader” as part of its pricing tactics? [31 Dec 2010]
Its curtains for UK consumer spending [12 Dec 2010]
Marketing strategy: North Face aims to become the “Nike of outdoors” [12 Dec 2010]
Business Pricing Tactics Under Scrutiny [12 Dec 2010]
Dominos Pizza - Growth & Strategy (Part 1) - Driving Competitive Advantage [26 Nov 2010]
Euro Disney - an HRM & Finance Nightmare? [24 Nov 2010]
Effective staff training - a cracking example [13 Nov 2010]
Revision Crossword - Pricing Basic [6 Nov 2010]
Profits up at Amazon - but so are costs [22 Oct 2010]
Pricing Strategy - Mobile Data Networks [14 Sep 2010]
Fighting for a share of the fast-growth tablet market [11 Sep 2010]
How inflation affects consumers [27 Aug 2010]
Inflation and profit margins - lessons from the market [27 Aug 2010]
Recession Strategy - Manufacturing Emerges Leaner and Fitter [25 Aug 2010]
Lesson Worksheet - Gross Profit Basics [5 Aug 2010]
Farmers v Supermarkets - the battle continues [19 Jul 2010]
Tyrrells Entrepreneur Does it Again - with Vodka! [14 Jul 2010]
Supermarkets set for a new price war? [13 Jun 2010]
The dangers of focus on one product [9 May 2010]
Pricing strategy in action - John Lewis (video) [25 Mar 2010]
Measuring changing shopping habits and inflation [15 Mar 2010]
Financial Ratio Practice Resource - Apple Inc [27 Feb 2010]
Can Greggs Become the Skoda of Pies? [16 Feb 2010]
Recession Tracker for UK Economic Data [1 Feb 2010]
Introducing business and the economic environment with Darling’s debt dilemma [27 Jan 2010]
How about a fat tax on burgers and sweets? (CTC2010) [24 Jan 2010]
Revision Quiz - Inflation [13 Jan 2010]
Flight to value has its impact on the Charity Shops [12 Jan 2010]
Retailer performance - interactive resource [12 Jan 2010]
Revision Quiz - Profitability & ROCE [6 Jan 2010]
Q&A - When is it appropriate for a firm to use penetration pricing? [21 Dec 2009]
Q&A - Explain price skimming [21 Dec 2009]
Q&A - What is the difference between pricing strategies & tactics? [21 Dec 2009]
Q&A - Explain what is meant by price positioning [21 Dec 2009]
Q&A - What factors should a business consider when setting its prices? [19 Dec 2009]
Q&A - How does pricing link to the objectives of a business? [19 Dec 2009]
Q&A - What is price and why is it so important in the marketing mix? [19 Dec 2009]
Amazon to move onto the High Street? [8 Dec 2009]
Video Case Study - The Supermarket Bullies? [20 Oct 2009]
Pricing strategies and tactics under investigation [15 Oct 2009]
Video report - pound hit by falling inflation [14 Oct 2009]
Providing What Customers Want? [16 Sep 2009]
The tills are alive with the sound of Woolies [3 Sep 2009]
Starter Activities - UK Retailers [9 Jul 2009]
Instore Takes a Pounding [6 Jul 2009]
Q&A - Outline the main costs and benefits of inflation [1 Jul 2009]
Q&A - Explain the causes of inflation [1 Jul 2009]
Q&A - What is inflation and how is it measured? [1 Jul 2009]
A Razor Sharp Way To Add Value [10 Jun 2009]
Video case study - the effect of deflation on businesses [19 May 2009]
Shareholder strategy at M&S [7 May 2009]
Q&A - What taxes will a start-up pay? [1 May 2009]
Product life cycle - can independent record stores extend their life? [20 Apr 2009]
Q&A - Why is the cash flow forecast so important? [1 Apr 2009]
Credit Insurance and Retailer Cash Flow [6 Mar 2009]
Improving cash flow by reducing stocks [1 Mar 2009]
Q&A - What is revenue? [1 Mar 2009]
Price war on the way - with chocolate as the winner [13 Feb 2009]
Q&A - What is a brand name and what are the advantages of having a strong brand? [1 Feb 2009]
Working with suppliers - the grocery battle [30 Jan 2009]
Psychological pricing in action - the power of £0.01 [12 Jan 2009]
Retailer Survivors Like a Deep Recession [7 Jan 2009]
Fixed-price retailing takes off in the UK [4 Jan 2009]
A Great Overview of the UK Retail Sector’s Problems [4 Jan 2009]
SWOT analysis for Britain’s leading high street retailers [30 Dec 2008]
Measuring consumer spending and retail activity on the high street [22 Dec 2008]
Bracing ourselves for a series of retail business failures? [21 Dec 2008]
Shoppers desert the department stores for an online Christmas shop [19 Dec 2008]
A tale of two retailers with contrasting fortunes in the slump [19 Dec 2008]
Quick starter puzzles on the high street retailers [5 Oct 2008]

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