Every Day Low Pricing | EDLP Pricing

What is Everyday Low Pricing

EDLP (Everyday Low Pricing) also stable prices is a pricing strategy which allows retail marketers to offer products at lower prices on regular basis without offering any discounts, sales offers or comparison shopping.  Under this pricing strategy initially retailers set low price and keep these prices over longer period of time.

Everyday Low Pricing Definition

It is a retail pricing strategy whereby presumably low prices are offered in the first place and maintained, as opposed to traditional pricing strategy that occasionally offer products at discounts.  In other words, it is a pricing approach where products are offered to consumers at lower prices on regular basis than offering low price at certain sales promotions.

In traditional retail store pricing strategy, retail stores offer different coupon promotions, discounts and loyalty programs for example Starbuck Reward and Tom’s one for one. But these types of promotions need time, money and manpower to sustain competitive advantages in the long term.

Everyday Low Pricing advantages

Those stores using EDLP strategy can focus on marketing message on quality rather than adverting sales.

Everyday pricing strategy provides consumers the convenience to avail low prices everyday than competitors’ prices. Competitors may provide low prices at regular interval but will not be available on everyday basis.

EDLP pricing strategy minimizes demand fluctuations that would occur regularly in traditional sales promotion and loyalty programs.  For example many retailers who offer sale promotion only on Black Friday or New Year will face it difficult to forecast demand accurately.

Those retail companies offer low pricing on everyday basis don’t need to promote each and every item individually or offer sales discount and promotions.

EDLP provide value to consumers by reducing their search cost and time.

Everyday Low Pricing Vs High Low Pricing

Retailers can follow more or less two types of pricing strategies i.e. high low and every-day low pricing. The High-Low strategy initially offers higher price and later on offers discounts and promotion to grab more customers. EDLP on the other hand, offers low prices on regular basis with fewer discounts.

There are many retailers like JC Penny who changed the price strategy from HL to EDLP that badly affected its financial performance and customer experience. A study shows that retailer will not only need to change their price strategy but also alter their marketing mix.

Everyday Low Pricing Examples

There are many firms, for example, Wal-mart, Amazon, Procter & Gamble, Winn-Dixie and Trade Joe’s who are offering everyday low pricing approach. According to a study 26% American retailers follow EDLP and 74% follow high low promotions.

Trade Joe’s Low pricing

Another example of EDLP is Trade Joe’s a successful brand that implements a niche marketing strategy and called itself a “neighborhood store”. It provides organic and natural food items that are difficult to find that give it a competitive advantage over competitors. Quality products and low prices are the key strengths of Trade Joe’s. The company is able to maintain its brand image and compete with giant retail stores.

Tesco Low Pricing Strategy

Tesco is a British multinational retail company in United Kingdom. By gross revenue it is the third largest retailer in the world. In 2016 Tesco official announced that it will follow everyday low pricing strategy and fewer promotion campaigns. Tesco is one of the last supermarkets who shifted from promotion and discounts to low pricing policy.