Pak’N’Save Hastings has launched its ‘aisle of value,’ selling household basics like canned tomatoes, beans, pasta and laundry powder for 50c.
Supermarkets struggle with initially getting people through the door. Therefore, Pak’N’Save Hastings would have chosen this strategy to attract shoppers, who will then also buy higher-margin items.
Usually, companies pay a co-operative fee and offer the product at a discounted rate so supermarkets can apply a margin. However, it is unlikely the manufacturer could provide a discount steep enough for a margin to be added within the 50c, so the strategy will most likely be a loss.
These types of specials also get people talking. One could spend a significant amount of money on advertising, but these types of specials create consumer conversations as it’s not something people expect to see.
Offering significant deals also attracts regional shoppers. People traditionally make trips from Southern Hawke’s Bay into Hastings for massive one-off shops, and deals like this will refocus those who have drifted back to their local stores.
Kristal Leach, manager of Budget First, administrator for the Hastings Food Bank Trust, agreed this is a loss-leading gimmick for the supermarket to pull in people, but it’s still good for clients who can stock up on things for winter.