Good value for money
- 3,300 lines have lower prices
- Price reviewed weekly
- Simple, strong promotions
- Volume increases leading to better buying
Notes
Value for money drives store choice. We face price led competition not just from the supermarkets but also from high street discounters. We had become uncompetitive and volumes were declining. We had to address this reality. We will offer great value through a combination of fair prices, strong promotions and a generous loyalty card scheme.
Lower prices you'll love was launched in April 2003. We have continued to improve pricing with 3,300 lines at markedly lower prices than they were then. We review the effectiveness of our pricing weekly. Some reductions exceed expectations and some don't. It is the same for all retailers and like all retailers we continually adjust our positions.
In addition to fair pricing, customers like our offers. They are now simpler and easier for customers to understand compared to last year.
We approach the second half having learnt a great deal. Higher volumes mean making more efficient use of your assets and leads to better buying. Our volume increases in the first half have been marginally ahead of expectation which gives us the opportunity to improve our buying terms going forward. We expect this to help us deliver a better gross margin performance in the second half.
Finally an important feature of our value work was the introduction of our Basics range in April. The 30 lines represent only a small percentage of sales in their categories but have attracted new customers in and seen many trade up on their return visit. This range will be important in improving our value perception over time.
