Supermarket Sleuths: How these yellow 'sales' tags could be costing you more
Updated . First published at
Saving at the checkout should be a breeze, but supermarkets don't always make it easy.
In a sea of yellow sales tags, and red discount signs, it is easy to feel overwhelmed, and sometimes even misled.
Believe it or not, these bold tags don't always reflect the lowest prices possible, making it harder for Aussie shoppers to stick to their grocery budgets.
In a sea of yellow sales tags it is easy to feel overwhelmed, and sometimes misled. Nine
But there is a way to use these sales tactics to help you save, as RMIT Finance and Marketing expert Dr Nadja Dollisson explains.
Why yellow and red sales tags work so well
Dollisson explained yellow and red supermarket sales tags and signs and associated wording "act as shortcuts that supermarket pricing strategy is built on".
"When we are doing a weekly shop, tired, time pressured, mentally juggling a list, our brains switch into what psychologist Daniel Kahneman calls 'System 1' mode: fast, automatic, pattern-based thinking," Dollisson said.
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Yellow and red sales tags 'act as shortcuts that supermarket pricing strategy is built on'. Nine
"In that state, we rely on simple rules, or heuristics, to make decisions without consciously evaluating every option.
"Yellow tags became one of those rules: yellow means bargain, no need to check."
This is the same psychology behind red sales tags and associated language being used such as "special" and "low" and "discount".
Customers believe they can "bypass the effortful price comparison" that could show some of these are not the lowest prices possible.
"Research on instore behaviour shows that shoppers under cognitive load are especially susceptible to peripheral visual cues, and supermarket environments are designed to maximise that load," Dollisson added.
This includes "end of aisle" displays which Dollisson said are a "deliberate application of this".
"Consumers have learned, through years of retail experience, that mass stack displays signal promotional pricing.
"Clearance sales, bulk deals and 'end of aisle' specials are almost always presented this way. The format has become a heuristic in its own right: stacked high means cheap.
"This is a conditioned association rather than a logical inference, there is no necessary relationship between how many units are piled up and what they cost, but the association is reliable enough that it operates automatically.
End of aisle and bulk discount displays have a similar impact of customers. Nine
"In this case the $9.50 appears to be a standard shelf price with no markdown.
"But the display architecture borrows the visual grammar of a promotion without making any promotional claim."
Are yellow and red sales tags losing their impact?
Dollisson believes yellow tags have "stopped working evenly, but have not stopped working" altogether.
"As yellow tags have proliferated, including on items that carry no genuine discount, like that standard shelf price water pack, the signal has become noisy," Dollisson said.
"In psychological terms, the cue 'diagnosticity' has eroded: the tag no longer reliably predicts what it once claimed to predict.
"Shoppers develop a vague sense that everything is perpetually on special, which should, in theory, neutralise the effect.
"But habituation is uneven."
Yellow sales tags may not be as impactful as they used to be. Nine
"The yellow visual cue still generates a processing fluency effect: repeated exposure makes the stimulus easier to perceive, and that ease is unconsciously experienced as mild positive affect.
"Shoppers feel slightly warmer toward yellow tagged items simply through familiarity, independent of any actual price difference. The tag has lost much of its informational value but retained its affective value, which is arguably more insidious.
"Crucially, the tag has not neutralised evenly across categories. It still bites hardest in precisely the places you describe: the meat cabinet, the higher priced items where the dollar amounts suddenly feel serious."
Why they still work on lamb and not biscuits
"On high value items, lamb cutlets at $43 per kilo, lamb shanks at $14 per kilo, something more powerful than habit kicks in: loss aversion," Dollisson said, citing Kahneman and Tversky's research on "prospect theory" and the "psychological pain of losing something".
"The psychological pain of losing something looms roughly twice as large as the pleasure of an equivalent gain.
"When the dollar figures are large, a perceived saving feels like dodging a real financial loss, and that is a far stronger motivator than a small saving on biscuits.
'When the dollar figures are large, a perceived saving feels like dodging a real financial loss.' Nine
"The yellow tag still reliably triggers this on expensive categories even after it has largely lost its power on everyday low cost items. This asymmetry helps explain why premium categories are disproportionately represented in promotional displays.
"It's not just about what is on special; it is about where the shortcut 'I am avoiding a loss' feels most emotionally charged, a dynamic that becomes even sharper in a cost of living crisis, when grocery budgets are already stretched.
"The special ticket on the lamb cutlets deserves its own attention," Dollisson explained.
"The 'save $8' in large font without a qualifier exploits a well-documented tendency to focus on absolute dollar figures rather than unit prices.
'The large font without a qualifier exploits a well-documented tendency to focus on absolute dollar figures.' Nine
"A typical lamb cutlet purchase of around 500g means the actual saving is closer to $4, but a $4 sign does not trigger the same loss aversion response.
"The per kilo price is technically available on the shelf label, but by the time you have registered the large format 'save $8' signage, the affective response has already occurred.
"Calculating the actual unit saving would require arithmetic under cognitive load, the exact opposite of the fast, System 1 mode encouraged by the store design.
"In practice, the big 'save' number functions as a nudge, not as neutral information. The anchor problem and the history we are not shown.
"The most concerning mechanism, particularly during a cost of living crisis, is anchoring. When a price tag displays 'was $14' and 'now $12' the quote functions as a reference point against which $12 is evaluated."
What such signage is missing is historic pricing, and context, she explains.
"The tag is not lying. But it is providing the minimum information required to construct a flattering comparison, and nothing more.
"Over time, repeated exposure to inflated reference prices gradually shifts our internal benchmarks upward.
"If $43 per kilo lamb is consistently presented as the normal price against which $35 looks like a win, $35 eventually becomes what we expect to pay.
"This slow corruption of internal reference prices means that even careful shoppers can find their sense of 'reasonable' has been quietly recalibrated without their awareness."
What customers can do today to pay the lowest prices possible
The ACCC is accusing Coles and Woolworths of breaching Australian Consumer Law by using "illusory" or fake discounts on hundreds of products, misleading consumers through their "Down Down" and "Prices Dropped" campaigns.
The watchdog is also alleging both supermarkets temporarily spiked prices before reducing them to a "discounted" price that was higher than or equal to the original price.
Coles and Woolworths are vigorously defending themselves against these claims.
Use the signs as a "prompt check" to make sure you are getting the best deal. Nine
Dollisson says customers can use sales tactics to protect themselves from paying higher prices by making one simple change. Nine
Regardless of the outcome of these actions, Dollisson says customers can use sales tactics to protect themselves from paying higher prices by making one simple change.
Instead of accepting the information being presented in the form of yellow and red sales tags and signs, use them "as a prompt to check, not as evidence something is cheap".
"On high ticket categories especially, it is worth having a rough sense of the per unit or per kilo price from previous shops, because that is the only reference point to being supplied by the retailer.
The saving might sound good, but you need to ask yourself why. 9honey/Jo Abi
"When you see 'save $8' on lamb cutlets, ask yourself: $8 per what?
"No regulatory change can override an automatic cognitive response in the moment. These mechanisms are not personal; they are designed to capitalise on predictable patterns in how we think and feel, but they were absolutely designed.
"Understanding them is the first, and most reliable, line of defence for households already stretched by the cost of living."
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