The Impact and Determinants of Nine-Ending Pricing in Grocery Retailing

Research into nine-ending pricing indicates a clear effect on sales but strong variance, suggesting that their effects are context dependent. This research relates nine-ending effects to a broad set of determinants and investigates the influence of brand, category, store, and store area clientele characteristics. The numerous empirically supported hypotheses indicate that the framework built on level and image effects is well adapted for explaining the effectiveness of nine-endings. They validate that a wide and indiscriminate practice of nine-ending pricing is not effective. The findings show that the impact of nine-endings can lead to sales losses (e.g., premium brands); however, a nine-ending price is more effective for increasing sales of small brands (e.g., low market-share, low price, and new items) that belong to weaker categories (e.g., low price, low budget-share). The effect erodes as the store's nine-ending pricing practices intensify. For category sales, a simulation reveals the existence of a threshold for which overuse is counterproductive.

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► The effectiveness of nine-ending prices varies across items, categories, stores, and store area clientele.
► In certain conditions (e.g., premium brands), nine-ending prices might generate a loss of sales.
► The impact on sales is particularly strong for small brands and low-involvement categories.
► Overuse yields lower nine-ending effects. It is also counterproductive at the category sales level.
► The level and image effect theory is well adapted for explaining the effectiveness of nine-endings.