EDLP, Hi-Lo, and Margin Arithmetic

@article{Hoch1994EDLPHA,
  title={EDLP, Hi-Lo, and Margin Arithmetic},
  author={Stephen J. Hoch and Xavier Dr{\`e}ze and Mary E. Purk},
  journal={Journal of Marketing},
  year={1994},
  volume={58},
  pages={16 - 27}
}
The authors examine the viability of an “everyday low price” (EDLP) strategy in the supermarket grocery industry. In two series of field experiments in 26 product categories conducted in an 86-store grocery chain, they find that a 10% EDLP category price decrease led to a 3% sales volume increase, whereas a 10% Hi-Lo price increase led to a 3% sales decrease. Because consumer demand did not respond much to changes in everyday price, they found large differences in profitability. An EDLP policy… Expand

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