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dm surprises with a drastic price turn - and could lose some customers

2020-02-27T14:18:13.674Z

The drugstore dm has long been known for its price guarantee. Now the group is increasing its prices drastically - over 1,000 products are affected.



The drugstore dm has long been known for its price guarantee. Now the group is increasing its prices drastically - over 1,000 products are affected.

"We want to offer permanently low prices and save our customers from comparing prices and looking for temporary special offers when shopping." With this quote from Erich Harsch, chairman of the dm management board, the drugstore chain advertises on its website with the " low dm permanent price ”- and even gives a guarantee. As Chip reports in reference to the food newspaper, the company seems to be deviating from this promise. The group is changing its pricing strategy - and could cause resentment among its loyal customers.

dm: 1000 products affected by price increase

Lange advertised for a long time with the promise that prices are the same online as in brick-and-mortar stores and will remain constant. According to samples from the food newspaper, the drugstore chain nevertheless raised prices of over 1,000 articles in the online shop within just three weeks, reports Chip . The price per product was between ten and 40 cents. Both articles from dm's own brands and branded products from other manufacturers are affected.

It is not uncommon for prices to be adjusted here and there. For example, they may be reduced. So dm lowered the prices for monthly hygiene products even before the official entry into force of the But behind the large-scale price increase, industry experts sense a change of course. As the food newspaper interprets, dm is no longer interested in maintaining price leadership over the long term. However, the company itself does not see these allegations confirmed and points out that economic factors and the market determine the prices. In addition, there are always reductions, for example when dm lowered the prices for monthly hygiene products at the end of 2019.

Local dm stores can adjust prices - depending on the location

Markets can also adjust their prices in local retail. However, this does not take place across the market from above, it is a matter of local branch decisions, reports the Süddeutsche Zeitung . "If a dm market varies the sales prices according to the respective situation, they always apply for at least four months," quotes the newspaper dm boss Christoph Werner. Customers therefore still do not have to prepare for frequent price changes and offers.

Prices need to be adjusted especially when competitors like Rossmann are positioned nearby. If other drug stores hit the corner, dm can lure you with cheap prices. However, if there is no rival in the area, the respective branch dictates the price and may raise it slightly. The prices should therefore be viewed relatively. After dm's growth has decreased, the new pricing policy appears to be aimed at increasing margins.

Can dm prevail in the fight against discounters?

It remains to be seen how dm customers react to this news. Especially with regard to constant offers and reductions in competition, dm has gained a lot of trust over the years, especially when it comes to price stability. The group now draws from this good image. In the constant struggle with discounters, the strategy could go wrong. But especially where customers could go to the competition, the price will remain low as usual.

A change at dm is currently annoying customers. The Payback bonus program is affected.

Some customers who complain on dm's Facebook page have no problem with the price. Rather, it disturbs the fact that many of the discounter's products are packed in plastic, although this would not be necessary.

Another customer found plastic in dm baby food. The company's reaction left her “stunned”.

Source: merkur

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