After we had to raise our prices in May, we have been working hard to find a way to lower the prices again in the long term. Among other things, we are trying to negotiate contracts with suppliers that guarantee us better purchase prices, but we are also working on finding suppliers who give us better prices.
However, all our measures require some lead time before an effect is really visible. So we can't immediately reduce our prices again, but we are confident that with the current measures we will be able to reduce prices in the long term.
Why another price adjustment?
After the last price increase we observed that some products were bought significantly less than before the price adjustment. Especially for products below 10,00 € we have observed a significant decrease in sales. This is probably due to the fact that some products were no longer competitive as a result of the last price adjustment.
One example is the organic oat drink: Before the price adjustment, the sales price was still € 2.50, afterwards it was € 3.00. The competition is much more favourably positioned. The competition is much cheaper, so the price increase only made us worse. Similarly, our bars and other smaller snack items.
How can we adjust our prices without making losses?
Raising the price of every item by 7.3% across the board meant that many items were no longer competitive. We are now adjusting our calculation so that the price increase is spread more evenly across the products. 50 cents more on a €2.00 product means a 25% increase, but on a €20.00 product it's only 2.5%!
In an earlier article we explained how our prices are calculated.
Which parameters have we changed?
-
For one thing, we have reduced our price advantage over the competition somewhat. Many of our products are still cheaper than those of our competitors. The difference to the competition is just not as big as it was before. For example banana chips without added sugar 1 kg now cost 10,50 € instead of 10,00 € before. The competition is around 10,80 €/kg. You don't save as much with us as before, but we are still cheaper than the competition.
Other examples:
-
We have left the minimum margin the same for low-priced products and increased it slightly for higher-priced products.
As already described above, the price increase has just thrown low-priced products out of competitiveness. Therefore, we want to keep the minimum margin for products the same as it was before. This does not mean that we will be cheaper than the competition, but we will be in a much better position than before:
Therefore we have to increase the minimum margin for higher priced products, especially the tray items, to compensate the lower margin products.
Conclusion
The price adjustment is intended to better distribute the price increase from May among the products. Products that were no longer competitive due to the price increase were reduced in order to be competitive again. On the other hand, products that offer a great price advantage have been increased in price slightly.
We are working on lowering our prices again and further in the long run. We will keep you informed!
Finally, here is an overview of the price changes of some of our bestsellers: