Business
Price has always been an essential marketing mechanism in retailing. It is obviously now of paramount importance when consumers are worried about losing their jobs in a post-Covid recession.On a recent shopping trip to Italy, it was therefore not surprising to find grocers like Interspar or Coop Italia proclaiming how they have frozen their prices. They do this everywhere on store banners, shelf stoppers, and price tags. They don't even spare their organic food departments. This is great for customers, but is it really good for retailer margins? After all, only one player can be the cheapest in the same way that only one gunslinger could ever be the fastest in the Wild West. Or are we really in some Italo-Western where all that matters is to be the last man standing?In the pursuit of an answer there is little point in talking with a discounter whose whole raison d'être is price. But what about a full-assortment grocer like Spar Österreich, Austria's leading retailer by sales, with more than 570 hypermarkets and supermarkets in northern Italy?This is a grocer, who has always been about quality, and therefore with a reputation to lose. So we asked country manager Paul Klotz how dangerous he thinks it is for Spar Österreich to play the price game in bella Italia...