In a move that’s being touted as a simpler way for shoppers to stick to a budget, Woolworths is moving all its prices to round numbers.
Turning its back on the age-old wisdom that customers put more weight on the dollar figure than the cents on a price tag, the supermarket giant is progressively rounding all its prices to numbers with a zero at the end.
Woolworths earnings report
Supermarket chain Woolworths has beaten rival Coles in sales growth for the first time in over 7 years.
As well as making it easier for customers to add up the cost of their shop, the shift to round prices is also likely to earn Woolworths a few extra cents on a lot of transactions, despite the chain’s claim that many prices will be rounded down.
Woolworths’ director of buying and merchandise Steve Donohue said the shift to round numbers was all about making the shopping experience simpler for customers.
“The prices are not all rounded up or rounded down, it’s about hitting the right number,” Mr Donohue said.
Woolworths has already moved to round prices on its most popular fresh and dry grocery items, with its latest catalogue featuring only a handful of prices ending in 99¢ or 95¢.
“I haven’t seen the psychology report on the matter but there is a lot more simplicity in pricing in retail now,” Mr Donohue said.
He said round prices were not only easier for shoppers to remember, when comparing the price of products, it also made for simpler mental arithmetic for customers working to a tight budget.
Woolworths’ Easter catologue shows how it has ditched the 99¢ from its prices. Photo: Supplied
Woolworths plans to move its entire range of about 20,000 products to round number pricing with the only exception likely to be half-price specials where it’s not possible to go to a round number.
Coles also appears to have moved to a round or whole pricing strategy with its latest catalogue featuring only a small number of products with prices not ending in zero.
Aldi hasn’t jumped on the round pricing bandwagon. Photo: Rohan Thomson
A spokesman for the chain said Coles aims to provide customers with simple price points to help add up cost of shopping and manage weekly budgets more easily.
German discount giant Aldi hasn’t jumped on the round pricing bandwagon, with its latest online catalogue full of prices ending in 99¢, 49¢ or 29¢ but it could be forced to change that, particularly if the five cent coin slips out of circulation.
Woolworths plans to move its entire range of about 20,000 products to round number pricing. Photo: Supplied
The shift to round pricing at Australia’s supermarket duopoly is likely to spell the end of the littlest member of the nation’s currency family, which is already living on borrowed time, according to the Royal Australian Mint.
Production of the five cent coin has already fallen to record lows and while Woolworths claims eftpos and credit cards have played a greater role in its demise than any other factor, round pricing will seal its fate.