Argos, owned by Home Retail Group, adopted a tactical stance on pricing for the launch of its latest big book last weekend, abandoning its usual policy of revealing the price reduction on reincluded catalogue lines. The retailer has instead emphasised an increased number of “wow” deals, a bolstered value range and adopted the tag "Helping you live for less".
The shift is a sign that retailers will increasingly take a more tactical stance on prices this year as they react to rising costs while maintaining appeal to credit-crunched consumers.
An Argos spokeswoman said that guidance on reincluded pricing would have been “less meaningful given current market conditions”. She added: “As always, our catalogue prices will be extremely competitive. Our aim would be to hold initial prices where relevant and to adjust other prices to the market where necessary during the life of the catalogue.”
Argos suffered a 7.5 per cent like-for-like sales decline over Christmas and Home Retail chief executive Terry Duddy has been frank about passing on costs to customers when possible. Prices on reincluded lines were flat in the autumn catalogue, but reductions have typically ranged between 2 and 4 per cent in the past.
However, the retailer is determined that it will not allow its reputation for value to be eroded. Argos has increased the number of value items from 150 to 230 and wow deals from 179 to 300.
The spokeswoman said: “In the latest catalogue we expect a highly competitive market and we’d expect to have to price adjust even more prices than normal.”
Investec analyst David Jeary said the change was understandable. He said: “It doesn’t undermine the overall value proposition. It reflects the more difficult conditions for retailers buying goods and the tough consumer environment.”
He believed similar changes would be seen across the retail sector. “Tactical pricing and more selective promotional activity will be the order of the day,” he said.
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