Are hypermarket prices different from discount store prices?

Abstract

Purpose Seeks to effect a comparison of the pricing strategies followed by hypermarkets, compared with those that discount stores carry out. Design/methodology/approach Data were collected from the direct observation of the supermarket shelves of nine frequent purchase product categories in several hypermarkets and discount stores. Diverse statistical analyses were applied to these picked up data, such as mean comparisons, ANOVA and correspondence analysis. Findings The article concludes that the hypermarkets tend to have higher mean prices, and use promotional tools more profusely than the discount stores. Research limitations/implications For future research, it would be very important to examine consumer price evaluations based on a theoretical approach in the same formats, and in this way consumer reactions to price changes could be understood. Also, examining the cross‐country differences in retail stores may be quite interesting. Practical implications Relationships between hypermarkets and hi‐lo pricing, plus discount stores and EDLP pricing, have been found. Therefore, retail managers of both formats have to know all about these pricing strategies. In this way, the managers of these firms would know the kind of customers that can be attracted and the signals and image that can be projected in the market. Originality/value This paper directly compares the pricing and promotional activities of hypermarkets versus discount stores. Researching into whether price and promotional differences exist between the two format retailers will help consumers and managers to know the true price level of each format.