Retail News CRM

Tag: pricing strategy

  • Temple & Webster Revenue Drops 8% as Price Hikes Lift Margins

    Temple & Webster Revenue Drops 8% as Price Hikes Lift Margins

    Temple & Webster recorded an 8 per cent drop in revenue from July 1 to October 19 as the online furniture retailer deliberately curbed discounting and raised product prices across Australia.

    Contribution margin dollars rose 16 per cent during the same period, offsetting the top-line decline through higher unit profitability.

    Pruning discounts to lift margins

    Chief executive Susie Sugden recalibrated merchandising terms by pulling back promotional depth across core catalogues and lifting prices on selected ranges. The strategy trades customer conversion volume for cash retention on every parcel dispatched.

    “Since our update in August , trading has improved, and the business has continued to step up its profitability, in line with our strategy,” Sugden said.

    Pricing discipline against regional discounters

    Pure-play e-commerce platforms spent two years chasing top-line revenue through perpetual sales campaigns, eroding cash reserves as freight and storage costs climbed. Temple & Webster is breaking from that pattern, accepting transaction softness to protect working capital.

    Competitors relying on aggressive clearance tactics face margin compression if supplier wholesale rates stay sticky. The risk sits in demand elasticity, because higher checkout totals may drive price-sensitive Australian households toward omnichannel operators and physical flat-pack discounters.

    The turn toward full-year profit targets

    Management laid the operational groundwork for the pricing shifts during the prior fiscal term after freight inflation began squeezing furniture delivery economics. The August update flagged early gains in unit efficiency, which the business consolidated through early spring trading.

    Earnings guidance for FY27 targets EBITDA between $33 million and $40 million, representing an increase of 50 to 80 per cent over FY26 performance. The retailer aims to cycle comparable promotional intensity starting in mid-February, setting that point as the baseline to restore double-digit top-line revenue growth by FY28.

  • McDonald’s Uses AI to Guide Menu Prices Across Global Markets

    McDonald’s Uses AI to Guide Menu Prices Across Global Markets

    McDonald’s is increasingly deploying artificial intelligence to guide menu prices across the US and international markets, according to reports in September 2026.

    The system supercharges pricing models by estimating how much each store’s patrons are willing to pay, a move designed to lift headquarters’ profit.

    How the Pricing Engine Operates

    However, the extensive use of AI risks alienating customers and attracting antitrust scrutiny, while franchisees report mounting corporate pressure over local pricing decisions.

    Price gaps between nearby outlets have widened under the algorithm. In Fresno, California, a company-owned branch listed a Big Mac at $5.69. Another company store two miles away charged $6.89. That is a 21 percent price premium for the same product.

    Franchise Rules and Compliance Tracking

    Corporate executives maintain that operators retain legal discretion over menu pricing. Even so, store owners report institutional pressure to adopt the algorithmic recommendations. Internal documentation from June confirms headquarters logs specific instances where franchisees deviate from recommended figures.

    Under business standards enacted in January, franchise operators must constructively engage with corporate-approved pricing consultants and digital tools. McDonald’s defended the system as an advisory tool rather than a mandate, designed to help operators navigate varying overheads and distinct trade areas.

    Operator Margins and Market Friction

    Centralized algorithmic models shift pricing control away from local store operators. Across developed Asian markets like Japan, Australia and Singapore, automated yield management tests consumer tolerance. Franchise networks in these markets already face elevated labor and supply chain costs.

    Quick-service brands risk swift pushback whenever digital systems create visible price gaps across nearby postal codes. Rival chains Wendy’s and Burger King confirmed they do not use automated artificial intelligence tools to alter menu pricing. Both chains are positioning themselves against algorithmic adjustments.

    The Race Toward Automated Restaurant Tech

    Fast-food conglomerates have accelerated investments in predictive automation over the past two years. The goal is protecting gross margins while testing value propositions for cost-conscious diners. Yum Brands, operator of KFC and Taco Bell, has similarly expanded artificial intelligence deployments across its global store network to streamline operational decisions.

    Presentations from corporate executives show earlier affordability initiatives aimed at retaining traffic among lower-income demographics. Investor filings show headquarters views the technology as essential to defending systemwide volume without sacrificing royalty receipts.

    Regulators and consumer protection bodies continue to review dynamic and algorithmically generated pricing structures across retail sectors. Attention now shifts to fourth-quarter store profitability reports and franchisee compliance metrics as operators evaluate how local foot traffic responds to neighborhood price adjustments.

  • Nearly Six in 10 Australian Shoppers No Longer Buy at Full Price

    Nearly Six in 10 Australian Shoppers No Longer Buy at Full Price

    Nearly six in 10 Australian shoppers no longer buy goods at full price, according to a KPMG report released in September 2026. The retail sector is being forced to adapt as consumers learn to wait out price cycles rather than simply weather a cost-of-living downturn.

    This shift has turned sale events into planned buying exercises rather than spontaneous sprees. Rachael Hockaday, managing director of retail performance agency Haeday, told Inside Retail that consumers are increasingly planning ahead.

    Shifting Consumer Timelines

    Consumer price discipline has eroded standard trading periods across the sector. Hockaday said shoppers now arrive at major sales events with a clear idea of what they want and the specific price they are willing to pay.

    “Sales become the time to buy, often with planning in between so they’re prepared,” Hockaday said.

    Margin Pressure Across Supply Chains

    Waiting penalises inventory holders who stock seasonal merchandise. Holding stock past scheduled markdown cycles inflates warehousing costs. It also forces deeper clearance discounts later in the product lifecycle.

    Suppliers and brand owners see their wholesale margins squeezed. Retail buyers demand larger vendor allowances and promotional funding to protect their gross margin targets when baseline shelf prices drop.

    Operational Risks for Landlords and Brands

    Lease structures built on turnover rent clauses face direct exposure to these tighter margins. Volume now concentrates heavily in discounted periods. Top-line revenue may hold, but net merchant profitability shrinks.

    Lower-cost international direct-to-consumer platforms gain an edge over domestic multi-brand stockists under these conditions. Domestic retailers carry heavy store fleet costs. They must compete directly with offshore digital operators running agile, on-demand supply chains.

    Discount Cycles Ahead

    Persistent cost-of-living pressures across major cities have entrenched this cautious buying behaviour. Consumers who adopted promotional tracking tools out of necessity have retained those habits as standard routines.

    Retail operators head into the final calendar quarter with inventory adjusted for heavy discounting. Upcoming peak sales in apparel, footwear, and consumer electronics will test whether full-price trading can recover in the next financial year.

  • Japan Convenience Store Chains Cut Onigiri Base Prices

    Japan Convenience Store Chains Cut Onigiri Base Prices

    Japan’s three largest convenience store operators, 7-Eleven, FamilyMart and Lawson, have cut base retail prices on onigiri rice balls after years of inflation doubled shelf prices for the staple snack.

    The reductions mark a permanent reset of baseline pricing rather than temporary sales promotions, targeting everyday basket affordability across thousands of urban outlets.

    Price Cuts Across Major Chains

    Lawson will reduce after-tax prices by 10 yen across all 20 varieties in its Temaki Onigiri lineup on September 29. Its Sea Chicken Mayonnaise drops from 181 yen to 171 yen, grilled salmon falls from 221 yen to 211 yen, and spicy cod roe mentaiko drops from 235 yen to 225 yen. Plum, kombu, and okaka variants will each decline from 194 yen to 184 yen.

    7-Eleven Japan is lowering prices on its core salmon and mentaiko rice balls by 19 yen, reducing both from 214 yen after tax. FamilyMart initiated its adjustments on August 24, cutting the price of its Kombu and Tuna Mayonnaise Big Musubi from 320 yen to 298 yen.

    Wholesale Relief and Volume Recovery

    Data from Japan’s Ministry of Agriculture, Forestry and Fisheries shows the average supermarket retail price for a five-kilogram bag of rice dropped 27.7 per cent between early this year and mid-August. Falling raw grain costs have given convenience chains room to adjust procurement and restore unit volumes that slowed when onigiri crossed historical psychological price barriers.

    For Japanese convenience operators, rice balls serve as primary foot-traffic drivers alongside canned coffee and ready-to-eat lunches. Chains spent two years passing input costs directly to shoppers, but price resistance pushed consumers to trim daily spend, prompting this coordinated push to protect store traffic.

    The repricing rollout will test whether lower shelf prices can restore transaction counts before quarterly sales figures reveal the impact on gross retail margins.

  • China Orders Automakers to Curb Overseas Price Cuts as Exports Surge

    China Orders Automakers to Curb Overseas Price Cuts as Exports Surge

    China ordered domestic automakers to halt volatile overseas price cuts and deceptive marketing across foreign markets on Tuesday, after passenger car exports reached 5.18 million units through July.

    Shipments of electric and plug-in hybrid vehicles jumped 129 per cent to roughly 2.77 million units over the same seven-month period.

    Jointly released by the Ministry of Commerce, the Ministry of Industry and Information Technology, and the State Administration for Market Regulation, the 20-article rulebook targets predatory pricing practices that damage brand reputations abroad. The agencies directed manufacturers to set export prices based on production costs and local supply, avoid abrupt discounts, and give foreign dealerships full autonomy over retail pricing. Sales incentives, customer gifts, and financing promotions must also comply transparently with host-market laws.

    Rules for Dealerships and Data

    Beyond showroom floors, the guidelines govern physical factory investments, which currently span more than 80 countries. Auto groups setting up regional assembly plants must adhere to local workplace safety, intellectual property protections, after-sales requirements, and labor standards.

    The policy also places strict limits on software and vehicle intelligence. Companies running connected-car or autonomous-driving systems abroad must handle consumer privacy and cross-border data transfers in accordance with local regulations.

    Exporting Domestic Competition

    Prolonged price wars inside China squeezed dealer margins and triggered aggressive showroom discounting over the past two years. By extending regulatory supervision overseas, Beijing is stepping in to prevent state-backed and private manufacturers from exporting those destructive discounting tactics into Southeast Asia, Europe, and Latin America.

    Passenger new energy vehicle shipments reached 540,000 units in July alone, capturing 58.8 per cent of total passenger exports, as manufacturers attempt to outpace the 8.32 million total vehicles China exported worldwide in 2025.

  • Australian Retailers Face Margin Squeeze as 59% of Shoppers Shun Full Price

    Australian Retailers Face Margin Squeeze as 59% of Shoppers Shun Full Price

    Australian retailers must overhaul operational discipline as 59 per cent of shoppers now refuse to pay full price, according to Grant Thornton Australia’s 2026 Retail Dealtracker analysis.

    Data from Australia Post’s FY26 fourth-quarter e-commerce update shows 46 per cent of consumers will switch stores for a discount, while 32 per cent report increased price sensitivity.

    The advisory firm identified five interconnected capabilities required to protect margins: customer proposition, earnings quality, operating model, technology, and organizational capability. Mounting pressure on household budgets means customer retention, repeat visits, full-price sales ratios, and customer lifetime value now carry far more commercial weight than raw top-line revenue growth.

    Protecting Margins Beyond Top-Line Sales

    Converting sales into profit requires tighter control over inventory, customer acquisition costs, returns, and shrinkage. Tam Goldin, financial advisory partner at Grant Thornton Australia, noted that many merchants need to strengthen fundamental disciplines, including clearer pricing and operating models that scale without adding unnecessary overhead.

    Shrinkage remains a critical operational drain for large physical store networks, while changing wage settings require closer management of store labor deployment. Retailers must track where value is lost across working capital rather than relying solely on headline profit and loss statements.

    Restructuring Operations and Supply Chains

    Scaling businesses frequently outgrow founder-led workflows, creating operational bottlenecks across supply chains and merchandising. Kirsten Ridgway, management consulting partner and head of retail at Grant Thornton Australia, pointed out that the largest opportunities emerge when companies simplify decision-making and align capital spending with actual customer demand.

    Supply chain models require flexible sourcing and inventory visibility to handle fluctuating lead times and freight expenses. Technology investments must resolve specific operational problems, starting with foundational systems such as point-of-sale platforms, integrated inventory tracking, and clean customer data before deploying artificial intelligence for demand forecasting and pricing.

    Across Asia-Pacific markets, rising labor costs and deal-seeking consumer behavior have forced merchants to pivot away from rapid floor-space expansion toward customer lifetime value and strict loss prevention. Retailers now face the next reporting cycle with shrinkage rates, full-price sales percentages, and inventory turns serving as the decisive operational numbers to track.

  • Shrinkflation Pushes Half of Australian Grocery Shoppers to Switch Brands

    Shrinkflation Pushes Half of Australian Grocery Shoppers to Switch Brands

    Eighty-five per cent of Australian grocery shoppers have noticed shrinkflation on supermarket shelves, driving half of them to seek out competitor brands when pack sizes shrink.

    The findings from the 2026 Australian Grocery Shopper Report show that reducing pack volumes rather than raising shelf prices carries immediate commercial risks for FMCG manufacturers. Overall price remains a decisive factor for six in 10 shoppers, but consumers now weigh cost directly against product volume, quality, and ingredient integrity.

    The cost of breaking consumer habits

    Consumer tolerance for stealth volume cuts has eroded sharply across grocery aisles. Focus Insights found that 60 per cent of shoppers do not believe packaged goods companies are transparent about size adjustments. When presented with the choice between a price increase or fewer biscuits in a pack, 59 per cent preferred the product to stay at its original size.

    Downsizing familiar products breaks repeat purchasing cycles. One in two consumers surveyed said they actively seek alternatives if a favourite item shrinks. One in three said they purchase the downsized product less often, and one in five said they stop buying the product altogether.

    The promotional trap for FMCG brands

    Price discounting adds another layer of margin pressure across the category. Nine in 10 shoppers said price promotions influence what they place in their baskets, with 57 per cent stating discounts almost always dictate their purchases. Frequent discounting cycles have conditioned 67 per cent of shoppers to defer purchases until products go on sale rather than pay full shelf price.

    For retailers and consumer packaged goods brands across Asia-Pacific markets, managing rising input costs requires explicit communication on shelf. Quietly trimming product weights threatens core volume share in high-frequency categories where private label substitutes are readily accessible.

    Focus Insights chief executive Deane Hubball and Believe You Me founder Blair Triplett will present the detailed category breakdowns and shopper sentiment data at industry briefings in Melbourne and Sydney next month.

  • Australian Retailers Face Margin Squeeze as 59% of Shoppers Shun Full Price

    Australian Retailers Face Margin Squeeze as 59% of Shoppers Shun Full Price

    Australian retailers must overhaul operational discipline as 59 per cent of shoppers now refuse to pay full price, according to Grant Thornton Australia’s 2026 Retail Dealtracker analysis.

    Data from Australia Post’s FY26 fourth-quarter e-commerce update shows 46 per cent of consumers will switch stores for a discount, while 32 per cent report increased price sensitivity.

    The advisory firm identified five interconnected capabilities required to protect margins: customer proposition, earnings quality, operating model, technology, and organizational capability. Mounting pressure on household budgets means customer retention, repeat visits, full-price sales ratios, and customer lifetime value now carry far more commercial weight than raw top-line revenue growth.

    Protecting Margins Beyond Top-Line Sales

    Converting sales into profit requires tighter control over inventory, customer acquisition costs, returns, and shrinkage. Tam Goldin, financial advisory partner at Grant Thornton Australia, noted that many merchants need to strengthen fundamental disciplines, including clearer pricing and operating models that scale without adding unnecessary overhead.

    Shrinkage remains a critical operational drain for large physical store networks, while changing wage settings require closer management of store labor deployment. Retailers must track where value is lost across working capital rather than relying solely on headline profit and loss statements.

    Restructuring Operations and Supply Chains

    Scaling businesses frequently outgrow founder-led workflows, creating operational bottlenecks across supply chains and merchandising. Kirsten Ridgway, management consulting partner and head of retail at Grant Thornton Australia, pointed out that the largest opportunities emerge when companies simplify decision-making and align capital spending with actual customer demand.

    Supply chain models require flexible sourcing and inventory visibility to handle fluctuating lead times and freight expenses. Technology investments must resolve specific operational problems, starting with foundational systems such as point-of-sale platforms, integrated inventory tracking, and clean customer data before deploying artificial intelligence for demand forecasting and pricing.

    Across Asia-Pacific markets, rising labor costs and deal-seeking consumer behavior have forced merchants to pivot away from rapid floor-space expansion toward customer lifetime value and strict loss prevention. Retailers now face the next reporting cycle with shrinkage rates, full-price sales percentages, and inventory turns serving as the decisive operational numbers to track.