Retail pricing behaviour

Shoppers can change what they buy, moving a retailer's revenue even when no individual shelf price changes. Pricing analysis therefore needs three separate views: the price of comparable items, the mix of items sold and the quantity bought. Treat them separately before claiming customers have become more price-sensitive.

Read the signals in order

Before drawing conclusions from turnover or sales data, check like-for-like products, units, product mix and other changes such as availability or seasonality. A companion article covers how to distinguish price increases from a richer product mix.

Steps to Accurately Interpret Retail Pricing Behaviour

Understand what turnover measures

The ABS Retail Business Survey covers employing retail businesses that predominantly sell to households, with estimates classified by industry and state or territory. It is a sampled business survey, so turnover figures are an aggregate measure rather than a record of each shopper's choices.

The monthly survey includes about 700 large businesses and a randomly selected sample of about 2,700 smaller businesses. Large businesses contribute approximately 69% of the total estimate, which the ABS says helps produce a highly reliable national turnover estimate.

ABS retail turnover is broader than sales across a shop counter. It includes retail and online sales, wholesale sales, takings from repairs, meals and hiring of goods, and commissions from agency activity; GST has been included since July 2000.

Key Retail and Price Metrics in Australia

Use price measures as context

The ABS Consumer Price Index is a general measure of price changes for consumer goods and services purchased by Australian households. It is produced quarterly, for the three months ending in March, June, September and December, and released on the last Wednesday of the month after each reference quarter.

The CPI is built from short-term fixed-weighted indexes that are regularly linked together. The ABS says this approach is intended to keep weighting patterns and item coverage relevant to user requirements and contemporary economic conditions.

Use the CPI to understand broad household price movements, not as a direct reading of prices or purchasing decisions at one retailer. Its purpose and coverage differ from a retailer's own records of displayed prices, sales and quantities.

Consumer Price Index (CPI) Release Schedule

ABS Retail Turnover vs. CPI: Scope and Purpose

Everyday prices and promotions

A companion article covers everyday-price versus frequent-promotion models. Promotions are one input into the full customer outcome.

Check price displays and unit prices

For grocery pricing, unit prices provide another point of comparison alongside the shelf price. The ACCC enforces the Unit Pricing Code, a mandatory industry code; concerns about unit pricing can be reported to the ACCC.

The ACCC also accepts reports from people who believe a business has broken rules about displaying prices. It uses reports to inform education, compliance and enforcement work, and may investigate and take compliance or enforcement action where price-display rules have been broken.

The ACCC does not provide legal advice to businesses about price displays or resolve individual price-display disputes. Its role is to consider reports and inform compliance work, so a report or investigation should not be treated as a finding about every shopper's response to a price.

Unit Pricing Code: Benefits and Limitations

Use evidence before making a behavioural claim

Companion articles cover claims about value-seeking behaviour and private-label comparisons. State any such claim at the level the evidence supports.