Why supermarkets differ in prices

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In a recent price survey, we found that certain supermarkets in Singapore practiced differential pricing in their various stores. To understand the practice better, we spoke to the Dairy Farm Group, the holding company for Marketplace, Shop 'N Save, Giant and Cold Storage.

src=https://sg admin.theasianparent.com/wp content/uploads/sites/12/2009/09/11347584 s.jpg Why supermarkets differ in pricesIn a recent price survey, we found that certain supermarkets in Singapore practiced differential pricing in their various stores. To understand the practice better, we spoke to the Dairy Farm Group, the holding company for Marketplace, Shop 'N Save, Giant and Cold Storage.

theAsianparent: We understand that under the Dairy Farm group, there's Marketplace, Cold Storage, Jason's, Shop 'N Save and Giant. In a recent price survey, we found that the different companies, under your holding group had extremely different prices. e.g, Cold Storage and Giant have different prices for the same product. Ref: MamyPoko at Giant Parkway retails at $10.50, and MamyPoko at Cold Storage Parkway retails at $11.00. Why is this so?

Dairy Farm Singapore : The businesses are operated by different management teams and each retail banner has its own business strategy and policy. The banners also cater to different segments of customers, Giant for example is a hypermarket chain while Cold Storage is a supermarket group.

theAsianparent We notice that there is a price differential between the different branches of Cold Storage. e.g, for Pampers New Baby (36s), it retails at $17.00 at Parkway Parade and at Siglap, it's $16.50. Why is this so?

Dairy Farm Singapore: In the retail and F&B industries, differential pricing is a common practice and is not unique to Singapore. This is because there are varying operating costs at different stores such as higher rentals in certain locations and popular malls. Pricing may also differ depending on the promotions held at the stores as some may offer special discounted prices on selected products.

Cold Storage Parkway is selling pampers New Baby 36s at $17 and Siglap is 3% lower, due to different locations and different costs of operations.

theAsianparent If it's to do with location and rental pricing, why then does Cold Storage Centrepoint sell items cheaper than Cold Storage Parkway Parade?

Ref: MamyPoko diapers which retail at Centrepoint at $11.00 and Parkway Parade for $11.28. Another example is the fact that Cold Storage Katong sells MamyPoko at $10.50 while the same item is sold online for $11. It cannot be a question of rental price, could it?

Dairy Farm Singapore : Pricing is affected by many factors. Location and rental is just one of them. Other factors include the market positioning of the store, the level of service and store ambience. Retailers also take into account the competitive strategy of each store in each neighbourhood.

In addition at Cold Storage Supermarkets:

1. We have a wide, comprehensive range of baby needs including milk powder and diapers catering to the needs of our customers.

2. We run weekly promotions in this category including quarterly "baby fairs" and the prices featured are often competitive in the market. We also source for special promotion packs with premiums or at value for money prices, exclusive to our chain.

3. We work very closely with our suppliers to ensure that our pricing is competitive.

4. We do have housebrand alternatives offering value for money prices eg. No Frills diapers and on the way First Choice diapers.

Editor's Note : Cold Storage has clarified that MamyPoko at Parkway is retailing at the same price as Centrepoint, which is $11.

 

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