Round numbers rule at U.K. retailers

round-pound-2Over the past year, U.K. grocers have been swapping their 99-pence price tags for round-pound sales. A report from trade magazine The Grocer found that the four big supermarkets—Asda, Tesco, Morrisons and Sainsbury’s—increased the number of whole-pound promotional price tags by 150 percent in the past year. Tesco stores even feature a designated “pound shop.”

As noted in a BBC story, the 99p price tag has long been used as a sales tool to convey value, the theory being that when the brain sees an item at £3.99, it registers the first digit and tells you that three is cheaper than four. “But over time,” reports the BBC, “customers have become wary of marketing tricks and sometimes even believe that a round pound price reflects more straightforward business practices—an important perception when competing for spending in recessionary times.” David Lewis, research director at Mindlab International, also told the BBC that 99 is registered as a bigger number than a round one (even though, of course, the round number represents 100 pence), and round price tags are frequently perceived as being rounded down from higher, fractional numbers.

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