Woolworths trials 'surge pricing': New trick to hike prices
WOOLWORTHS denies it is trialling Uber-style surge pricing despite electronic tickets popping up in at least one of its stores.
A former Woolies employee has revealed the supermarket giant has trialled electronic pricing which is currently being used in the UK and allows retailers to hike up costs during peak periods and public holidays by having electronic LCD screens instead of paper tickets.
Despite trialling the technology, a Woolworths spokeswoman told news.com.au it had no plans to introduce surge pricing to its supermarkets, saying electronic price tags would only be introduced to make operations more efficient.
The ex-staffer told news.com.au Woolworths conducted a trial in its store in Schofields, 45 kilometres from Sydney's CBD.
The price tags were replaced with digital LCD screens that could be changed remotely. The ex-staffer said the trial at Schofields ended last year and the LCD screens removed.
The former Woolworths store manager told news.com.au he saw business plans for e-pricing, a technology that could boost the supermarket's savings.
"It was to reduce the wages and the labour it takes to put those tickets up each day or each week, and take them down again," the former employee said.
"Supermarkets can react quickly with pricing, instead of waiting for the next week."
He said there was no "Uber-style" pricing planned to his knowledge, but the electronic price tags would save four hours worth of wages a week in each of the 992 stores across Australia.
"When I was working there, when the electronic price tags first went up, it was going well. The savings were there," the former employee said.
"The one thing Woolworths was concerned about was without the ticket on the shelf, customers wouldn't realise things were on special. Tickets are shelf talkers and they were concerned customers wouldn't pick up impulse specials."
He said ticket pricing was time consuming and believed electronic price tags would be beneficial.
"I know how much time it takes, how much it costs and how hard it is to get the tickets done before the store opened. I think it's a great idea," he said.
Retail analyst at Retail Oasis Pippa Kulmar told news.com.au e-pricing was efficient and would allow the grocery price wars to continue, with supermarket giants able to price match instantly with a competitor.
She said prices would increase and decrease due to supply and demand, much like it does with ticket pricing, but would be more instantaneous.
"Coles and Woolies will be able to react quicker to competition and less time is spent by staff updating ticketing," she said.
University of Melbourne consumer psychologist Brent Coker said surge pricing in Australia would force shoppers to radically change their habits and could drive customers to the smaller chains offering a traditional style of shopping.
"There's a learning curve with consumers," Dr Coker told news.com.au.
"Now, people are used to going to do the supermarket shop at 5pm on a Sunday and that's their routine. With e-pricing, there might be a spread of customer purchasing behaviour as they come to realise shopping during the Sunday night peak hour might not be cost effective.
"They might have to start shopping on a Monday afternoon."
A Woolworths spokeswoman told news.com.au Woolworths was always looking at innovative ways to make shopping more convenient for customers when visiting the stores.
"When it comes to surge pricing we do not have the capabilities to introduce this, nor are we planning to develop them," she said.
"Woolworths are focused on providing our customers with everyday great value on the products they love, no matter what time they shop."