The Shift in Brand Pricing Strategies You Need to Know About 🪅

For years, the UK grocery scene painted a clear picture: Aldi was the budget champion, while Marks & Spencer carried the premium badge. Their brand pricing strategy shaped perception. If you wanted the cheapest groceries, you went to Aldi. If you wanted quality and prestige, you paid more at M&S.

But that tidy divide has started to blur. Reports in the UK now show that M&S is narrowing the gap, with certain staple products priced surprisingly close to Aldi. Suddenly, customers can’t assume that budget always equals cheapest, or premium always equals expensive. This shift shows how flexible a brand pricing strategy can become when supermarkets compete for both value and trust.

If that’s happening in a market as well-defined as the UK, it raises an important question: what about markets closer to home?

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CHOICE Survey Highlights a Shift in Brand Pricing Strategy

In Australia, the story is strikingly similar. CHOICE, the consumer advocacy group, released a survey showing that while Aldi remains the cheapest supermarket overall, Coles and Woolworths are no longer far behind.

The survey found that staples—bread, milk, and pantry basics—are often priced within just a few cents of each other. For shoppers, the once wide gulf between “budget” and “premium” banners is now harder to spot.

This creates a challenge. If Aldi still positions itself as the low-cost leader, but Coles and Woolies deliver near-identical basket prices, what do customers actually perceive about their brand pricing strategy?

So why are the differences shrinking when the brands themselves are positioned so differently? The answer lies in how supermarkets balance pricing and positioning strategy with customer expectations.

What’s Driving the Change?

Budget chains like Aldi are not immune to inflation and rising supply costs. To manage pressures, they’ve had to lift prices—even if modestly. That eats into their long-held price gap.

On the other hand, premium supermarkets like Coles and Woolworths know they can’t ignore price-sensitive shoppers. Their brand pricing strategy has sharpened around staple lines, ensuring essentials look competitive while still charging more for branded or premium-labelled products.

The result? A recalibration. Instead of Aldi being dramatically cheaper and Woolworths dramatically pricier, the two ends of the spectrum now overlap in key areas.

This means the old “cheap vs premium” divide no longer explains customer behaviour. Shoppers are more fluid, switching stores based on specific categories, promotions, or perceived value, reflecting how marketing brand positioning now plays into everyday choices.

The New Rules of Brand Pricing Strategy and Perception

Here’s where it gets interesting. Inflation in Australia has started to ease, but the habits it created are sticking. Shoppers remain highly price sensitive. They compare and they question. They want reassurance that they’re not overpaying.

That puts pressure on every supermarket, regardless of position. For Aldi, the message can’t just be “we’re cheapest” when the data shows only a narrow gap. For Woolworths, “we’re premium” risks falling flat if staples are priced the same as Aldi’s.

Instead, the focus is shifting to perception. It’s less about the absolute difference in cents, more about whether customers feel the price makes sense for what they get.

For businesses outside of groceries, the lesson is clear: a strong brand pricing strategy is no longer about extremes. It’s about calibration, clarity, and the story your prices tell.

And for businesses, this makes deliberate, strategic pricing more important than ever in shaping marketing brand positioning and long-term value.

Protect Value Anchors in Your Pricing and Positioning Strategy

So how should pricing teams respond? The first step is to avoid chasing competitors blindly. If Coles drops the price of milk, that doesn’t mean Woolies must follow. Constantly reacting erodes margin and confuses customers.

Instead, focus on “value anchors.” These are the products or services customers notice most when judging whether your brand pricing strategy feels affordable. In supermarkets, it’s bread, milk, and eggs. In other industries, it might be entry-level packages, shipping fees, or headline services.

Protect those anchors. Keep them sharp. Customers judge you on them. Then, recover margin in less visible areas—products or services that aren’t top-of-mind for price checks. This keeps the brand’s value perception intact while supporting marketing brand positioning and ensuring profitability doesn’t collapse.

But pricing teams can’t do this alone. They need leadership backing to stick to a consistent price-based branding approach and not fall into reactive discounting.

Build Marketing Brand Positioning Through Clarity and Trust

Executives often see pricing as a lever for quick wins. Drop a price here, run a discount there, and hope to lift sales. But long-term, this undermines brand trust.

Customers want clarity. They want to know that your brand pricing strategy makes sense, that it’s stable, and that they won’t be punished for loyalty. Consistency matters more than scattered discounts.

The strongest brands in today’s climate are those that use pricing to send a clear message. Is your business about reliable everyday value? About transparent quality? About rewarding loyalty in predictable ways? These are choices leaders need to make and reinforce through clear marketing brand positioning.

Because in the end, brand strength doesn’t come from erratic promotions. It comes from the trust you build over time, supported by a price-based branding approach.

And that brings us to the bigger lesson—pricing isn’t just a number game.

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The Importance of Brand Positioning in Making Pricing Strategic

The supermarket wars show us that price-based branding is shifting. Aldi can’t rely solely on being “the cheapest,” and Woolworths can’t rely solely on being “the premium choice.” Both now compete in a middle ground shaped by perception, trust, and a clear brand pricing strategy.

For other businesses, the lesson is clear: pricing is not just about margins or discounts. It shapes how customers see you, whether they trust your brand, and whether they believe your value is fair. Strong pricing and positioning strategy can make all the difference.

That’s why leaders and pricing teams must review their approach regularly. Every decision—whether a small adjustment or a major promotion—needs to align with customer value and the brand promise.

Because pricing and branding go hand in hand, the businesses that thrive will be those that recognise this and act on it. If you want to explore this further, let’s talk. Together we can build a marketing brand positioning approach that works for your business today and keeps you strong tomorrow.

For a comprehensive view of integrating a high-performing capability team in your company, Download a complimentary whitepaper on A Capability Framework for Pricing Teams.

Are you a business in need of help aligning your pricing strategy, people and operations to deliver an immediate impact on profit?

If so, please call (+61) 2 9000 1115.

You can also email us at team@taylorwells.com.au if you have any further questions.

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