Minimum Advertised Prices

[abfab]

Just saw this interesting article in the Globe & Mail.
http://www.theglobeandmail.com/repor...ticle17360748/

[Tinkerbella]

That is awful news

[FLA]

Very insteresting.

[couponandoff]

Read that yesterday too - it explains why I haven't seen pepsi or coke on sale for $2.99 since last fall. Grocers will need to ramp up their bonus points programs to entice us to purchase products with a mandatory MAP!

[TooCouponCrazy]

Wow, interesting indeed.

[luckbealady]

I wonder about their strategy - for example, I like Alpha-getti every once in a while, and buy it whenever it's on for $0.88 or $0.99. If it goes the way of Chef Boyardee and has a minimum price of $1.20, I just won't buy it.
Actually, that goes for many things - yes I enjoy them, but I'm not going to spend more on them. I'll switch to store brands or just give it up completely.

I'm not sure there's as much product loyalty as these companies believe they have - I believe most people can't afford to pay "higher end" prices for products that they are used to paying less for.

I also don't own any stores, so I can't comment on how pricing works. I thought manufacturers sold the products to the stores, and then the stores set the prices for the consumer to give them a slight profit. Are the manufacturers saying because the stores get little to no profit when the product is on sale that they make less money?

[blueeyetea]

I also don't own any stores, so I can't comment on how pricing works. I thought manufacturers sold the products to the stores, and then the stores set the prices for the consumer to give them a slight profit. Are the manufacturers saying because the stores get little to no profit when the product is on sale that they make less money?

It's more complicated than that. For competitive segments, the manufacturer pays the store for the retail space where their products are displayed, making sure they're visible. On top of that, the stores will also force the supplier to sell them the products are a certain price.

It used to be that forcing retailers to sell above a certain price was banned, but it was allowed again in 2009. It's an image thing. Some brands don't want to be seen as a "discount" product.

[GeorgiaK]

I think that we need to remember that the article states "advertised prices". The stores can have in-store promotions or rebates or clearances, just as long as they don't advertise the "sale" in the flyer.