Pricing Insights from Leading UK Retailers

Earlier this month, Revionics partnered with Retail Gazette to bring together top UK retailers to discuss the future of pricing. Joined by delegates from leading brands like Tesco, ASDA, JD Sports, and more, the conversation tackled important themes shaping pricing strategies for 2025 and beyond.

Below are some of the key takeaways and considerations for retailers today.

1. Pricing Organisation: Centralised vs. Decentralised Approaches

There is no one-size-fits-all approach for pricing organisational structure. While some retailers find a fully centralised team brings consistency, others prefer to leave more pricing responsibility in the hands of the buyers.

However, most retailers agreed that there is a need for centralised and decentralised approaches to coexist. One retailer leverages a hybrid structure, with certain types of products and promotions managed centrally and others decentralised. Another retailer utilises central oversight and technology-driven guidance to inform buyers' pricing decisions.

As retailers continue to refine how they structure their pricing teams, careful financial planning and monitoring are required for finding that balance of control, flexibility, and technology, as well as for ensuring alignment between incentives and objectives.

2. Dynamic Pricing: Strategic, Not Just Reactive

Pricing has become, and likely will continue to be, more dynamic in the face of global uncertainty and instability. While a 'return to stability' was debated during the discussion, most in attendance have accepted volatility as the new normal in retail, requiring pricing to remain agile.

There is a recognised need for more dynamic pricing, but retailers are taking a deliberate approach in order to protect customer perception.

When adopting dynamic pricing, it's important retailers account for all the impacts beyond just margin improvement. Data accuracy, labour costs, and overall pricing strategy are just a few of the other important factors that influence the success of dynamic pricing.

And of course, electronic shelf labels (ESLs) often come up when discussing dynamic pricing. While they are still not the norm, we are seeing increased adoption of ESLs around the world to reduce the operational burden of frequent price changes.

3. Customer Loyalty: Beyond Just Discounts

Retailers use a variety of price and non-price practices to encourage loyalty. For some, it is important to have a simple, easily understood price position, while for others, providing services and experiences to drive value outside discounted prices is what matters most.

Personalisation is a big buzzword these days, and many retailers do see it as a major opportunity. Promotions targeted to specific customer segments can be a helpful loyalty driver, if backed by the right analytics.

Ideas such as donating to charities or issuing vouchers for local schools and groups were also discussed as alternative ways to build loyalty beyond traditional discounts.

4. Price Index Methodologies: Different Approaches for Different Retail Models

At one point, the conversation turned to the increasing competition in the market, including from discounters. While the entirety of this topic covers a broad range of challenges, strategies, and more, one interesting aspect was the discussion around how to measure price competitiveness.

In general, retailers vary in their approaches. Some use a sales-weighted price index to ensure pricing decisions reflect actual customer purchasing behaviour, while others favour unweighted indices, which can be more appropriate for a flatter sales distribution.

We've also seen retailers use a custom-weighted method, either making adjustments to specific items or leveraging a hierarchical approach, first weighing categories strategically and then individual items by sales.

Looking Ahead

The discussion made it clear that pricing strategy remains a critical focus for retailers. Whether through organisational structure, dynamic pricing, loyalty programs, or competitive positioning, the ability to adapt quickly while maintaining price image and profitability will define success in 2025 and beyond.

We greatly appreciate all the retail leaders who joined us for this roundtable and contributed to an engaging and insightful discussion. For more retailer-led pricing insights, watch this video to hear how The Exchange is transforming its pricing to better serve customers.