This article examines various pricing strategies that grocery stores utilize to remain competitive.

Appropriate Subject Area(s):

Pricing, business management, competition, marketing

Key Questions to Explore:

• How do pricing policies make a store more or less competitive?

New Terminology:

• Football prices, ad collision, ad match, provide coverage

Introduction to lesson and task:

The lesson examines the intensifying pricing battle in the fast-consolidating Canadian grocery sector.

Action (lesson plan and task):

• Review the marketing mix with the class: Four P’s Product, Price, Place and Promotion.
• Review pricing strategies with the class, including:
  • Keystone pricing
  • Cost-plus
  • Penetration
  • Skimming
  • Meet or beat the competition
• Discuss the notion of meet or beat the competition and explore how a store does this. What are the implications?
• Distribute the article for reading.
• Have students individually prepare a charted summary of the article highlighting the key points.
• In groups of four, have the students share their highlights and discuss their understanding of the article.
• As a class, discuss Loblaw’s positioning within the grocery field.

Consolidation of Learning:

• Have students write a one page paper on why they think the Competition Bureau is concerned about Loblaw’s pricing practices.

Success Criteria:

• Students understand price competition and can distinguish between the various pricing strategies.

Confirming Activity:

• Have students examine three products commonly used in their household and compare the prices either in-store or online at three different sellers.  Have them share with the class what they discover..