The prevalence of price as the main competitive weapon in grocery retailing shows some signs of abating. Price is clearly a hugely important part of a retailer’s value proposition, but it is noticeable that many of the more successful retailers around the world aren’t necessarily the cheapest. Price leadership in a market is usually the territory of limited-assortment grocers like Aldi or Lidl, ultra-efficient supermarkets such as Mercadona or Colruyt or general discounters such as Walmart.

With price supremacy out of reach for most other retailers, it is left to them to pursue other value drivers in order to create a balanced value equation that can attract and retain shoppers. One of the most underused words in the grocery industry is ‘appropriate’. Prices don’t necessarily need to be low – they need to be appropriate in light of other factors such as shopper missions, urgency, convenience, experience, service, range and quality.

Shoppers are demonstrably happy to pay a premium in exchange for convenience, higher quality, superlative service or a more engaging experience. Of course, this is not to say that price doesn’t matter or that prices should be allowed to drift way out of line with market norms, but there is so much more nuance to value than price alone.

Around the world, many retailers have realised that they need to demonstrate keener pricing in categories that matter to shoppers – normally produce, proteins, dairy and core grocery staples – either through everyday low prices or through a varying array of compelling promotions. An increasing number of supermarkets have attempted to recalibrate value perceptions in these key categories by price matching discount retailers. Once derided as providing free advertising to competitors, price-matching is now seen as a mechanic that reassures shoppers in the categories that matter.

Promotions are another way of demonstrating value. They create excitement as well as temporarily lower prices but remain something of a Goldilocks affair: there shouldn’t be too many (inefficient and disruptive; and there shouldn’t be too few (boring). Something of a happy medium is required, as is a degree of collaboration with suppliers to ensure that promotions are impactful and executed well.

The inexorable rise of loyalty schemes and ‘member-only’ pricing shows no sign of decelerating. If anything, more and more retailers will adopt this strategy in 2024. While there are some critics of these two-tier pricing systems, notably peeved by these schemes’ undemocratic nature and by concerns over data and privacy, the majority of shoppers seem to enjoy them. The fact that most of these schemes also offer cumulative rewards like discounts or vouchers is the icing on the cake and it has been no real surprise to see legions of supermarkets join the fray.

The key thing about price is remembering that it is just one of many value buttons to press for shoppers appealing mainly to the head. But what about the heart? Undoubtably  there are softer, less transactional ways to generate value and loyalty in the eyes of the customer. Areas where great campaigns can connect in a far deeper way with shoppers and give them a reason to shop with a particular retailer. Fantastic examples are happening right now all across Europe from REWE in Germany to Lidl in Poland where every time someone shops with them they can reward their local sports clubs. Or in the US where a division of Albertsons is working with Masterchef to reward and inspire shoppers to turn their wonderful produce into amazing meals. One key side effect of this kind of Value Creation is the opportunity to do some good for shoppers and communities too.