What can we learn from Penny’s “True pricing” experiment?

German discounter Penny pulled a daring stunt last year: the chain charged the “true prices” for nine products, to include their environmental and health impacts. Less sustainable products suddenly became a lot less attractive…

Twice the price

In August last year, discount supermarket Penny suddenly almost doubled Maasdam cheese and Frankfurter sausages in price, while mozzarella became 75 % more expensive. The chain said it would charge these “real prices”in all 2150 German stores for a week to highlight the impact of food on climate, water, soil and health.

The chain has now presented the results of the campaign: not only did it analyse sales figures analysed, but it also surveyed more than 2,000 consumers, Lebensmittel Zeitung reports. The drop in sales speaks volumes: eight of the nine products sold less during the campaign, such as regular mozzarella (- 43 %) and organic mozzarella (- 29 %). The only product that sold more was a meat substitute, which was only 5 % more expensive than before. The higher the environmental charge, the greater the drop in demand, they saw at Penny.

More aware

Price is indisputably the number one argument: 85 % of customers who did not buy the products, did so because they thought the products were too expensive. Only 46 % answered that environmental aspects were not important.

Price-based nudging clearly works, Antoine Geerinckx of CO2Logic responds: “People do not want to spend more money on products that are unhealthy or have a high environmental footprint. If the real cost were to be passed on, you would therefore push consumers towards more sustainable products.”

In that way, the campaign was indeed a success: 53 % of respondents said the campaign had made them more aware of the true cost of food, while 38 % felt it had sparked a political debate. That debate did not always turn out in Penny’s favour, though: 46 % called the campaign greenwashing. After all, the criticism was that not all costs had been taken into account and that the supermarket chain did continue to come out with (too) low prices. A similar “true pricing” campaign by Albert Heijn about the true price of coffee was also criticised.