Everyday low price

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Everyday low price ("EDLP") is a pricing strategy promising consumers a low price without the need to wait for sale price events or comparison shop. EDLP saves retail stores the effort and expense needed to mark down prices in the store during sale events, and to market these events; and is believed to generate shopper loyalty.[1] It was noted in 1994 that the Wal-Mart retail chain in America, which follows an EDLP strategy, would buy "feature advertisements" in newspapers on a monthly basis, while its competitors would advertise 52 weeks per year.[1][2]

Procter & Gamble, Wal-Mart, Food Lion, Gordmans, and Winn-Dixie are firms that have implemented or championed EDLP.[2]

One 1992 study stated that 26% of American supermarket retailers pursued some form of EDLP, meaning the other 74% were Hi-Lo promotion-oriented operators.[2]

One 1994 study of an 86-store supermarket grocery chain in the United States concluded that a 10% EDLP price decrease in a category increased sales volume by 3%, while a 10% Hi-Lo price increase led to a 3% sales decrease; but that because consumer demand at the supermarket did not respond much to changes in everyday price, an EDLP policy reduced profits by 18%, while Hi-Lo pricing increased profits by 15%.[2]

References[edit]

  1. ^ a b "Every day low pricing (EDLP) Definition", Allbusiness.com. Fetched 7 April 2010.
  2. ^ a b c d "EDLP, Hi-Lo, and Margin Arithmetic", Stephen J. Hoch, Xavier Dreze, & Mary E. Purk, The Journal of Marketing, Volume 58, Number 4 (October 1994), pp. 16.27. Fetched from Web site 7 April 2010.