The pricing strategies of Hungarian food retail chains during the last recession

Abstract

Retail Pricing Strategy Z. BEREZVAIThe paper seeks to explore the pricing strategies used by Hungarian food retail chains and how these strategies are related to the market and fi nancial performance of the chains. A two-phase empirical research was carried out in 2011/2012. The research is based on 44 in-store observations, the analysis of price promotion leafl ets and interviews with retail professionals. In-store observations focused on collecting data on baseline prices. The price promotion leafl ets enabled the assessment of the promotional activity of the observed retailers. The interviews were used to check the validity of the research results. By grouping the analysed 11 retail chains along baseline price levels and price promotion activities, three different types of pricing strategies were identifi ed. A relationship was found between the three pricing strategies and the performance indicators of the included chains. An important fi nding is that retail chains with a medium price level and low promotional activity were the least successful, while retailers with a low price level and high promotional activity achieved the best performance.