Asda's heavily publicised round pound lines have become a key part of its promotional offer but almost one in five of these lines sold for less than a quid just months ago.
The retailer which recently won The Grocer 33 cheapest supermarket award for the 12th year running has been making much of its 7,000 lines at £1 or less, using the claim as the centrepiece of a recent ad campaign. It has also committed to roll back at least 300 products to £1 for the duration of 2009.
But some other round-pound products at the retailer were selling for less just months ago. Research by Brand View for The Grocer found 1,328 round-pound products on Asda's website on 28 July.
Of these, 459 were added in a recent range expansion so have not been analysed. The remaining 969, however, were checked against prices on 1 March. A third (319) were exactly the same price, while 477 were cheaper in July than March though this included Rollback and other short-term promotional deals.
Yet 173 of Asda's round pounds 18% of the total cost more in July than in March and 46 of these had been for sale at 90p or less in March. The researchers took measures to exclude short-term promotional prices from this group.
Last month, Asda chief merchandising officer Darren Blackhurst told The Grocer that round-pound pricing worked because consumers believed that prices were reduced to £1, not increased. "We aren't rounding prices of products up to £1, we are rounding them down," he said.
Promotional consultant Kay Staniland said that the strong association between the £1 price point and discounts would allow Asda to increase prices without many consumers noticing it was doing so.
"Asda does have some huge savings," she said. "But it does often introduce small, hard-to-notice price rises of a few pence to offset some of the cost of these deals. Consumers see products at £1 as a bargain, and perhaps don't always think too hard about the starting price. But Asda had made a big deal of going head-to-head with stores like Poundland, so raising some prices to exactly £1 could backfire."
Some of the big price rises include Asda chocolate spread, up from 74p to £1; Lucozade one litre, up from 77p to £1; and Pedigree chicken dog treats, up from 67p to £1.
An Asda spokeswoman said many of the increases to £1 were expired Roll-backs, or products that had been cut to half price returning to their original £1.
"Week in, week out we've got 7,000 products across the store for £1 or less," she said. "While the products may change, that promise to customers doesn't and it's our unbeatable value that's seeing more people than ever shopping at Asda."

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