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PRICING STRATEGY

How supermarket shoppers are being pushed to make unhealthy choices

By our News Team | 2023

Researchers speak out against dubious pricing strategies that are encouraging cash-strapped consumers to buy unhealth products in bulk.

In a finding that will also resonate with African consumers, researchers at Charles Darwin University in Australia have discovered that rising supermarket prices are likely pushing people to make more unhealthy food choices.

Unfortunately, aggressive marketing tactics are playing a part in this swing. Unhealthy food brands are rewarded shoppers who buy bulk items with significantly cheaper prices per item. But, at the same time, those same brands are penalising shoppers who purchase smaller volumes of the unhealthy products.

Pricing Strategy

Photo by Jack Sparrow from Pexels

Findings of the study were published last week in the peer-reviewed academic Journal of Strategic Marketing.

Lead author on the study and Professor in Marketing at the university, Steven Greenland, said price was a key motivator of people purchasing unhealthy products and brands were using this to their advantage.

“The gap in savings between small and large volumes of unhealthy brands is much greater than the price gap in healthy food items,” he emphasised.

While bulk savings are not new, the study showed that the difference in pricing between small packages and buying bulk packages was wider with unhealthy products than healthy products.

Price is recognised as the key consumption predictor 

“This reinforces the decision to buy unhealthy products, and of course this means people will be eating more unhealthy foods,” he said. “Price is recognised as the key consumption predictor within the unhealthy product marketing mix – particularly for low-income consumers – and the issue is widespread.”

According to the latest Consumer Price Index from the Australian Bureau of Statistics, food and non-alcoholic beverages in the country rose by 9.2% in the 12 months to December 2022.

Professor Greenland said the volume pricing has helped to undermine pricing regulations in Australia that aim to lower the consumption of unhealthy foods.

“We need more robust regulations to ensure that the cost of eating unhealthy foods is fully factored in,” he stated. 

“Public health regulators need a better understanding of how unhealthy brands marketed themselves using price incentives, and the affect this is having on the psychology of the shopper.”

Your can read more about the study ‘Marketing unhealthy brands—an analysis of SKU pricing, pack size and promotion strategies that increase harmful product consumption’ here.

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