Everyday “Fair” Pricing – the End of Hi-Lo as We Know It?

Every shopper loves a deal, and today finding one takes a swipe. With a smartphone in hand, your shoppers can compare your shelf price against the competition in seconds. Price too high and you risk losing them. Price too low and you risk your margin, or worse, a race to the bottom.

The biggest names in grocery are wrestling with that same tension right now, and they are doing it in the open. It is why a third path is gaining ground, one that sits between the two strategies every operator already knows. We are all familiar with hi-lo and everyday low price (EDLP). AlixPartners has made the case for a more balanced model called everyday fair pricing (EDFP), and in a market where value-seeking now reaches across every income level, it is worth a serious look.

What is Everyday Fair Pricing?

Everyday fair pricing blends more competitive everyday prices with fewer, more purposeful promotions. Think of it as a hybrid of hi-lo and EDLP. To shoppers, it means not having to plan trips around the weekly circular. It means feeling like the value they get matches the price they pay. Ultimately, it is pricing they can trust across the whole basket.

AlixPartners frames it the same way: everyday prices close enough to competitors, with promotions aimed at real goals like driving traffic or building private-brand trial, rather than run week after week to offset high everyday prices. It is less a rejection of hi-lo than a recalibration of it for how people shop now.

Why now?

Shopper behavior has moved. More than half of consumers now spend most of their grocery budget outside traditional grocery, according to FMI data cited by AlixPartners. And in AlixPartners’ shopper research, 32% of shoppers said they would rather have consistently competitive prices than prices that swing between very low and very high.

The industry is responding in public:

• Walmart has cut prices on roughly 7,200 products, which is up more than 20% over last year’s rollback program.
• Kroger dropped 3,500 prices in December 2025 with a note that more are coming.
• Target lowered prices on 3,000 products by between 5 and 20%, in March, catering to “busy families.”
• Stop & shop cut prices on “thousands of items” in May of 2026 across national brands and private label.
• On the supplier side, General Mills has adjusted prices on nearly two-thirds of its North American retail lineup to close gaps to competition, and PepsiCo has trimmed prices on snack brands like Doritos and Cheetos by up to 15%.

What is telling is that even the companies cutting hardest are being selective about where. Kroger’s new CEO, Greg Foran, put it plainly: the objective is for customers to feel a Kroger price is “fair and reasonable,” not to match the discounters on everything.

That distinction matters, because mass price cuts are not a pricing strategy on their own. They are a costly, hard-to-reverse response to a price-image gap that has usually built up over years. The operators navigating this moment well are being deliberate about which prices to move and which to hold.

Price image carries this much weight for a simple reason: price does most of the work in how shoppers judge value. Deloitte’s research found that in grocery, price perception explains 87% of the variation in how consumers perceive value. The rest comes from things like quality, freshness, and trust, which is exactly why a fair everyday price paired with a clear value story outperforms a wall of temporary discounts.

There is a deeper shift underneath all of this, and it is the real reason a single fixed strategy is harder to sustain. Value-seeking is no longer just a low-income behavior. Deloitte finds that four in 10 Americans now qualify as value seekers, and nearly three in 10 of them are younger families earning six figures. When budget-minded and affluent shoppers are working the same aisles for value, a pure hi-lo approach can leave margin on the table, while a pure EDLP approach can starve the promotions that still bring people in. Neither is wrong. Each simply has a blind spot in this environment.

McKinsey’s latest read on North American grocery lands in the same place: advantage is shifting away from individual levers and toward connected systems, where value depends on how pricing, key value items, promotions, and private brands work together. Price image is no longer a shelf-tag question. It is a whole-strategy question.

Cutting prices strategically

The key takeaway from industry giants cutting prices, is that it’s done strategically rather than wholesale. The operators who come out ahead are not the ones slashing the widest. They protect the key value items shoppers judge them on, find margin on premium items and stop overinvesting in unproductive promotions. That discipline is what funds a fair everyday price without giving away the store.

Done this way, the results are measurable. ClearDemand customers have moved KVI pricing compliance up as much as 2x, and in some cases as high as 100%, so the prices they set on the items shoppers watch most actually hold. One NRF Top 20 grocer discovered that roughly a third of its historical promotions were unprofitable, allowing them to reallocate valuable spend to more productive areas. A premium regional grocer grew profit 2.78%, built on measuring which decisions truly created value rather than cutting across the board. That is the shift we help you make: use optimization and competitive intelligence to build a pricing and promotion strategy that protects price image and grows margin at the same time.

The full picture: cannibalization, halo, and promotional effectiveness

Fewer, sharper promotions only work if you can see how each one performs. That takes a connected view of price, promotion, and competition.

• Cannibalization and halo: know before you run an event  to what extent a chip promotion lifts volume on salsa, and how much it cannibalizes other salty snacks. The economics of the full basket, not just the promoted item, decide whether an event earns its place.
• Basket analysis: with competitive intelligence and price optimization working together, you can spot the relationships in the data, like chips and salsa consistently selling together, and price the relationship rather than the item.
• Value measurement: most tools cannot tell you which pricing and promotion decisions worked. That is the black box problem, and it is why merchants override recommendations they cannot see behind. Measuring each decision against what would have happened without it, accounting for seasonality, stockouts, and competitive shifts, turns that guesswork into proof, so you know where to reoptimize and where to hold.

Smarter pricing within your strategy

Regardless of who your competition is, you need pricing that meets your shopper’s value equation and works for your bottom line. In a market where shoppers of every income are hunting value, the winning move is rarely one fixed strategy. It is the ability to run the right blend: promotions where they drive trips, steady everyday value where shoppers judge you, and margin where you have room, down to the item, category, and market.

[Read more: the K-Shaped Economy and how a varied price strategy is the solution]

See where to invest, and where to hold

ClearDemand’s platform is an IDC MarketScape Leader in retail price optimization, and built to support whatever strategy you run, while helping you pivot as the market moves. Your strategy stays in the driver’s seat and the science makes it executable at scale.

Everyday fair pricing works when you know exactly which prices to protect and which to invest. ClearDemand brings competitive intelligence, price optimization, and promotion optimization into one unified platform, so your team can plan and build a strategy that protects price image and grows margin.

Request a demo and we will show you what it looks like in practice. Not ready to chat? That’s ok too! Check out our 2026 Grocery Pricing Checklist or take our Pricing Maturity Assessment, to assess where you are in your pricing journey.

FAQ

Is everyday fair pricing the same as EDLP?

No. EDLP holds prices low and flat across the store with few promotions. Everyday fair pricing keeps everyday prices competitive on the items shoppers watch most, then layers on fewer, more purposeful promotions, aiming for pricing shoppers trust across the whole basket.

Does everyday fair pricing mean lowering prices?

Sometimes, but selectively. It sharpens everyday prices on the items shoppers notice and holds steady where you are already competitive. Many retailers fund those sharper prices by retiring promotions that were not earning their keep, building a price image shoppers trust without cutting across the board.

Is hi-lo pricing dead?

No. Hi-lo still works, and promotions remain a strong way to drive traffic and trial. What is shifting is the balance. As shoppers of every income compare prices more closely, many operators are recalibrating toward steadier everyday prices with sharper, more purposeful promotions. It is an evolution of hi-lo, not its end.

How do you fund more competitive everyday prices without giving up margin?

By reclaiming margin you are already spending inefficiently. Promotions are the most common source: many events lose money or pull sales forward without adding volume, and retiring them frees funds for the prices shoppers notice. Category-level pricing adds room, letting you hold competitive key-item prices and recover margin where shoppers are less price-sensitive. If you are not sure where that inefficiency sits today, our 2026 Grocery Pricing Readiness Checklist is a practical place to start.

How do you decide which prices to lower and which to hold?

Start with key value items, the products shoppers use to judge whether a store is fair. Those earn your most competitive everyday prices. From there, hold or optimize prices in categories where shoppers are less sensitive. Knowing where your prices stand against competitors and watching how demand responds to each change is what turns that into a repeatable decision rather than a guess.