What does leader pricing aim to achieve?

Leader pricing aims to attract customers through competitive pricing of key items. This pricing strategy involves setting a low price on a specific product to draw customers into a store with the expectation that they will also purchase other items, which may not be discounted. By positioning certain products as "loss leaders," retailers can increase foot traffic and overall sales volume, as consumers are often drawn to the store by the prospect of purchasing these competitively priced items.

This strategy is particularly effective for items that are frequently bought or considered essentials, as it can signal to consumers that the store offers value and encourages repeat visits. Leader pricing can help build customer loyalty as shoppers may return for the perceived savings, ultimately boosting the retailer’s market presence and long-term profitability even if the individual discounted items do not contribute to profit margins directly.