High‐low pricing: audit evidence and consumer preferences

Abstract

In spite of their importance within pricing strategies, “seasonal sales” have received little attention within the literature. The recent interest in “high‐low” pricing has, however, increased the attention given to temporal shifts in store‐wide, rather than item level, prices. Following a brief review, this paper draws upon two case studies of leading retailers of apparel in the UK. Evidence is also presented from audits of pricing and markdown activities over a three‐year period, illustrating some contrasts between stated strategies and actual pricing activities. A cost‐benefit analysis of high‐low pricing requires knowledge of consumer preferences and attitudes. Results are drawn from a study of over 2,600 “sale” shoppers, indicating stated preferences for markdown frequency, depth and coverage. In general “sale” shoppers appear to prefer a variety of markdown levels, increasing their scope to succeed as bargain hunters.