Earlier this week, dollar discount stores operator Dollarama
announced its third quarter results. It also took the opportunity to announce
what Larry Rossy, Chief Executive Officer, described as “exciting new
products”
to be introduced during the first quarter of 2009. And guess what? They’ll be
priced between $1.00 and $2.00. The real reason: rising prices for goods
imported from the Far East.
This prompted some to suggest that Dollarama may want to change its name…
Short-sizing
While Dollarama might soon be thought of as Twodollarama, consumers are increasingly witnessing the impact of another pricing strategy called short-sizing: food manufacturers reducing the size of packages but maintaining the price. See this New York Times story on short-sizing.
It refers to a survey conducted by Consumer Reports magazine in the U.S. in July that found that 75 percent had noticed that packages were smaller and that 71 percent believed that the main reason for the change was to hide price increases from consumers.
The same NYT piece refers to Lynn Dornblaser, a new-product expert at Mintel, who recently conducted an informal survey involving 100 products at the supermarket and found that about 10 percent had been downsized in the last 12 to 18 months. “The size of the package and the price of the package are almost secondary,” said Ms. Dornblaser of Mintel. “What becomes important is the unit price.”
Quebeckers and price sensitivity
Quebeckers are more interested in finding value-added products than Canadians in the ROC according to data from Crop’s 3SC study. What Crop calls “Elite Consumers” (those who attach more importance to differentiated products and are less price sensitive) represent 19% of Quebec’s population, compared to 13% in the rest of Canada.
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