How Grocery Chains are Using Bať Prices as a New Marketing Trick: Economist Explains

Some grocery chains end up with so-called Bať prices. The prices of food, whether it is a standard offer or discounts, began to be displayed with precision to units of pennies. According to economist Petr Bartoná, it’s a new marketing trick.

A kilo of flour for 15 crowns and 48 halers or a kilo of chicken sausages for 72 crowns and 95 halers. Some retail chains, not only on discount flyers, but also on counters, have almost stopped rounding prices to 90 pennies. It concerns, for example Billy, Penny Market or Tesco.

As Petr Bartoň, economist and data analyst of the company DataRun, pointed out, speculation immediately arose as to why this is so. Some claim that it is related to the current issue surrounding the introduction of the euro, but there are also explanations that it is due to accounting.

But according to Barton, this is a marketing ploy: “Chains are trying to create the impression that their prices are so cut down to the minimum that after the reduction of VAT on food from 15 to 12% they are cheaper. And that’s because they recalculated the old Bať prices exactly according to the new, lower tax, and so it just came out to those strange pennies, not a penny more, not less. That they simply went with prices for the pulp before, and now with the new tax, the pulp is coming out like this.”

According to Barton, this is nonsense. “It is the Baťa prices that prove that the chains did not go to the pulp before, but rounded up to the nearest Baťa price. Once it was rounded up, once it was rounded down. If they went to the marrow, then there would be no reason to expect that, even with the old tax rates, the minimum possible prices would always end up like Baťa. They would have ended up with random pennies a long time ago, like now,” he commented.

Bartoň anticipates that this procedure will take a few weeks at most. According to him, it will be more interesting to see if the given chain returns to somehow rounded prices at once in all prices, or gradually for individual items.

“In the latter case, it would be easy to spot which prices are no longer at the so-called minimum. So maybe we’ll see some other marketing event that will round all prices down for our benefit, we’ll supposedly get a second discount, and we’ll sleep peacefully in the Baťov world again Whether the euro eventually comes or not,” added the economist.

But only those who pay by card “earned” on the new prices. For cash, the price is rounded to whole crowns.

​Some foods have lower VAT since the New Year. Watch TV Nova’s report from last week: