After years of inflationary pressure, the conversation in grocery has shifted. Retailers are recalibrating, shoppers have reset their expectations, and suppliers face a deceptively simple question: what pricing strategy actually works for my category in 2026?
The honest answer is that “It depends”, and it varies hugely dependent on how shoppers approach your category and brands. Most suppliers are using a far more blinkered decision making process than they need to on this crucial matter.
Key Takeaways
- Four shopper postures, four different strategies — everyday price sensitivity and promo responsiveness define which pricing levers actually work for your category.
- Category averages can mislead you — a premium variant and a value line often sit in completely different quadrants and need different approaches.
- Over-promoting can hurt more than help — in everyday price-driven categories, it erodes margin without moving meaningful volume.
- Shopper data changes retailer conversations — evidence of how your shoppers behave shifts the dynamic from negotiation to shared strategy.
Table of Contents
- Two levers, four very different shoppers
- Why blunt category averages can mislead you
- Making pricing strategy ‘land’ in retailer conversations
Two levers, four very different shoppers
Our shopper driven framework at here Shopper Intelligence maps categories along two feedback led dimensions: how sensitive shoppers are to everyday base price (EDLP), and how responsive they are to promotions and deals. These two axes give us four distinct shopper postures, each defining a fundamentally different approach. The more extreme your category the more important it is to flex accordingly.
Everyday Price-Driven?
These categories and brands have high EDLP sensitivity but low promo responsiveness. Sharp everyday pricing builds trust. Over-promoting will therefore erode margin without driving much volume.
Examples: fresh milk, packaged bread, pasta.
Dual-Lever Value
Here categories are high on both dimensions. That implies a need for both competitive shelf price plus well-timed promotions. Weak everyday pricing undermines promotional credibility.
Examples: baby food, dog food, health foods.
Price-Insensitive
Being low on both dimensions for these categories neither price lever will move the needle much or give a good ROI. Rather this implies investing in brand, convenience, loyalty and in-store experience instead.
Examples: pain relief, potatoes, packaged rolls.
Promo-Elastic
Lastly this is about Low EDLP sensitivity, but high promo responsiveness. Discounts drive the majority of behaviour change. Depth, frequency and in-store visibility trigger switching and stock-up.
Examples: chocolate bars, hair colour, cosmetics.
Why blunt category averages can mislead you
One of the most important findings from our work across 45,000+ shoppers in Australia covering both Coles and Woolworths is that your specific brand or an individual pack size can often sits in a different quadrant from your category average.
A bulk multipack bought by a household stock-up shopper behaves very differently from a convenience single-serve grabbed on the way out the door. A premium variant attracts shoppers who are relatively price-insensitive; a value line may sit squarely in promo-elastic territory. Applying a single pricing strategy across your entire range leaves significant opportunity on the table and can actively damage the perception of products that need a different approach. The devil is in the detail.
Making pricing strategy ‘land’ in retailer conversations
The framework isn’t just an analytical tool, it’s also a persuasion tool. A way to win over others. For example, when you walk into a supplier-retailer session armed with shopper data that positions your category correctly, you move the conversation from negotiation to shared strategy.
Retailers respond to evidence. Showing that your category is Everyday Price-Driven gives you grounds to argue against excessive promotional dependency. Demonstrating Promo-Elastic behaviour justifies investment in high impact in-store activation. The data makes the case that price decisions aren’t arbitrary, they follow what shoppers actually do.
As cost pressures moderate and retailers reclaim promotional control, suppliers who have mapped their categories and brands to this framework will be best placed to influence ranging, pricing and promotional decisions. Those still relying on category averages or gut feel will find themselves in reactive conversations rather than leading them.
The question to answer before your next retailer meeting isn’t “what discount can we afford?” it’s “what does our shopper actually respond to, and are we investing accordingly?”
If you’d like to see where your categories and brands sit across get in touch with our teams today.
