Don’t let the shelf fool you.
Prices aren’t going up. Not in the way most shoppers would notice. But look closer — and more importantly, add up your basket — and the story changes.
Across Europe, supermarkets are quietly rewriting the rules of retail pricing in 2025. It’s not about who’s cheapest anymore. It’s about who can raise prices without making it obvious.
Shoppers still want value. Retailers want profit. Who bends?
Let’s be clear: no one wants to blink first. Retailers have razor-thin margins. Shoppers are still price sensitive. Suppliers? Caught in the middle.
Here’s how supermarkets are solving the equation:
Loyalty schemes now shape pricing strategy. “Club-only” prices let chains show one number on the shelf and charge another at checkout — depending on who’s logged in.
Basket-level inflation is replacing product-level hikes. It’s not that milk costs more — it’s that you’re nudged to buy three to get the deal. And that third item? It wasn’t on your list.
One retail pricing director summed it up perfectly:
“We’re not raising prices — we’re redesigning how they land.”
Shrink the pack. Blur the price. Call it “innovation.”
That 500g pasta pack? Now it’s 450g.
Multi-buys are framed as savings — but per-unit cost often rises.
Private label lines are getting premium packaging to justify price increases, not necessarily better ingredients.
Call it shrinkflation. Call it sleight of hand. Either way, it works. And most shoppers don’t complain — because on paper, the price hasn’t changed.
The tech underneath the tactics
This isn’t guesswork. It’s algorithms.
AI-driven pricing engines — the kind used by airlines and ride-hailing apps — are now powering your supermarket’s shelf decisions.
One northern European retailer is running over 25,000 micro price tests a month. Not online — in physical stores.
Different prices in different postcodes. Different loyalty offers based on shopper profiles. It’s invisible, but it’s everywhere.
What it means for suppliers: Less room, more rules
If you’re on the supplier side, you already feel the pinch.
Negotiation leverage is shrinking. Retailers come to the table with real-time price sensitivity data. They know what your product can bear.
More pack formats are being demanded. One SKU for baseline, another for loyalty, another for promos. And they all need different margins.
Promo spend is quietly rising. Retailers may reduce listing fees, but they’re clawing it back through co-funded offers and in-store activations.
A chilled goods supplier told GSN:
“We’re spending more on trade marketing than on freight. That’s not sustainable.”
This isn’t just about price. It’s about perception.
Retailers have learned something over the past three years: You don’t need to be the cheapest. You just need to feel like the best value.
That’s why we’re seeing:
Price points ending in .99 disappearing — replaced by £4.00 flat. It reads cleaner. Less discount-y.
Limited edition packaging to make basic SKUs feel premium.
Loyalty discounts that are now the default, not the reward.
It’s psychological — and it’s working.
Final thought: The price war didn’t end. It just went underground.
Everyone’s still fighting. They’ve just changed the weapons.
Instead of slashing labels, retailers are betting on stealth, data, and shopper habits. For brands and suppliers, that means one thing: you need to bring more than just cost. You need to bring flexibility, fast format development, and your own shopper insights to stay on shelf.
Because in 2025, the price isn’t the battleground anymore — the perception is.
