French supermarket drops controversial ‘dynamic pricing’ practice

French supermarket group Casino has decided to abandon its ‘dynamic pricing’ practice of increasing the prices of many everyday items in its stores on Sundays.

It was confirmed this week that the brand previously used this practice in 300 of its stores, starting in 2018, to enable them to open on Sundays.

‘Dynamic pricing’ is a method of changing prices of some products on some days, to compensate for higher costs. Casino had said that it changed prices on some everyday items automatically overnight from Saturdays to Sundays, as this helped it to keep stores open on the ‘day of rest’.

The practice was revealed this week by journalist Olivier Dauvers. He found that some products at some branches of the supermarket were sold at prices up to 36% higher (and on average 15% higher) on Sundays. The prices were pushed automatically via digital price displays.

Significant changes were found for products including:

• €2.10 to €2.85 (increase of 36%) for one pack of Danette
• A rise of 64 cents for four Activia yoghurts (up 28%).

‘Purchasing power’ backtrack

On February 9, Casino issued a statement to La Dépêche saying that it had stopped the practice.

It said: “In trying to push all initiatives to help purchasing power, Casino has taken the decision to no longer apply the ‘dynamic pricing’ method on Sundays.”

It comes within the context of rising supermarket prices across France, and still-rising inflation levels.

Read more: Inflation in France: Which foods have risen most, will rises continue?

‘Yield management’

Although the system has only recently come to media attention the practice has been in operation for years in Casino supermarkets.

A statement from Casino directors had confirmed the practice, before it was announced it would be stopping. It said: “The first store concerned was one store in Lyon that started to open autonomously on Sunday in December 2018.”

At the time, Casino boss Jean-Charles Naouri spoke about why he supported the practice, saying that it was similar to “what railway transport and airline companies do with yield management”.

Casino previously justified these higher prices, saying that they helped pay for the cost of opening shops all day on Sundays.

The directors’ statement explained that the higher prices paid for “the cost of powering the store, employment of security staff, extra staff on Mondays to rearrange the store…these are all things that mean we must increase our prices for some of our products”.

It added that these increases represented “4% of our business on Sundays, meaning 0.4% over the course of the week”. All of the products targeted are all popular items, Casino said, adding “We realised that customers are as likely to do a ‘top-up’ shop on Sunday just as much as a ‘big shop’...[and] opening on Sundays is very much appreciated [by our shoppers]”.

Other supermarkets say they shun practice…so far

However, another major supermarket group in France, Système U, said it had not followed suit on the dynamic pricing method, and was not planning to use this pricing mechanism in the future.

Spokesperson Thierry Desouches said: “Everyone has their strategy, and this is not a criticism, but it is not how we envisage doing things. We don’t want the client to suffer the cost of having our shops open on Sundays.

“Our aim is to maintain the lowest price possible all the time, so if we think that opening a store on Sundays costs too much, we won’t do it.”

Neither Carrefour, Leclerc nor Intermarché have yet commented on whether they use the practice, or are planning to at a future date.

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