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The Perils of Moving to EDLP Pricing

Written by TABS Analytics | August, 13 2015

EDLP and It's Effect on Sales - An Example

We've written on several occasions about the problems with EDLP pricing as a trade promotion tactic. In fact, this is highlighted in a recent blog post where we noted that doing fewer, deeper trade promotion events is always preferable to running frequent, moderate promotions (including EDLP.)

These are the results from a move to EDLP for a leading beverage brand at a leading food retailer: Base Units -15%; Incremental Units -92%.

 

This is not an aberration; it happened to JC Penney on a corporate scale and many others, as well.