Nosh jacks in the cheap milk, didn’t work

Last year Nosh made a big splash by discounting milk. It couldn’t possibly work, ask any proper supermarket about loss leading.

All the tactic did is make them headlines, swamp the stores with bludgers looking for cheap milk and buying nothing else. Eventually you go broke if the only thing people buy you are making a loss on. The Herald reports:

Nosh’s new boss is brimming with ideas for driving sales at the upmarket grocery chain – but offering cut-price milk isn’t one of them.

Retail dairy prices are an emotive issue in New Zealand and Nosh gained a lot of publicity last year from offering milk for as little as $2 for 2 litres, which resulted in a small loss for the company.

Hayden Syers, who became chief executive in July, said the loss-leading strategy hadn’t been successful.?

“It brought a lot more people into stores that were really just buying milk and it really didn’t result in other sales,” he said. “We’re definitely not going to repeat that milk promotion. The numbers didn’t work.”

Nosh now sells 2l for $3.49, or two bottles for $6.50.

Syers, a chartered accountant who describes himself as an “extreme foodie”, said Nosh would drive sales through educating customers about food – including new barbecue classes targeted at men – and providing a great in-store experience.

Everything thing else at Nosh was and still is dreadfully expensive and those people looking to save a few cents on milk won’t buy expensive apples at the same time.

Never mind though Labour will move to regulate the industry shortly insisting on pricing commissars in every store.