Learn With Us
Join the Newsletter

Pricing Compression: How Often Is Selling By Price Happening?

pricing compression Mar 07, 2022

We're kicking things off in our Price Compression Series with a look at how often selling by price is happening in-store. We know Budtenders everywhere are being asked on a daily "What's the best value for money?". We spend time in stores, we hear it. As an industry, the majority of stores are selling products by price.

Why? Because communicating the features and benefits of cannabis is complex. It's a lot of information for anyone to remember.

What's the common denominator that everyone understands? Price. We are using this as a way to influence menu presentation, products, and budtender training.

When we take a look at the average basket in Ontario in January and February of 2022, it declined by an average of $10.58 vs. the year prior and March is shaping up the exact same way. (Source: Headset



So what can we do? Baby steps. 


Quantify the ask. How deep is the customer's request for the price? Retailers encourage your budtenders to record exactly how many customers in a day identify price as the main decision-making criteria. Over a one-week period, what percentage of customers was it overall? Translate this to a number out of 10.

  1. Use this data to train how many out of 10 customers identify price as a decision driver at your store. This will make it real, and highlight how many opportunities really exist where the price is not the main driver. Reassess quarterly.
  2. Look outside of price and identify another criteria point that is important to your customers (quality, effect, crafted, etc). Ensure every product in stock can be discussed using this criterion. This gives you a baseline conversation to have as a substitute for price, creating a common denominator. This has to be what resonates with customers today, not what we want customers to care about.

Reassess inventory assortment to ensure it services the customer shopping. Where is there an opportunity to rationalize low-margin or low-price SKUs that are not serving your customers by having them in stock? Get them out. These can drag down profitability and average per customer.


With this topic, you have two core stakeholders. The teams who make the inventory and assortment decisions, and budtenders making product recommendations. The information and collateral you create for the two, may not be the same.

  1. Ask retailers who are purchasing your products, why? How do they position your product within their assortment? This will start to give you an insight as to how important the pricing of your product is in their assortment.
  2. What are the patterns in the way your product is merchandised at retail? How could the price be informing velocity? How does this change by store geography? Share these insights with sales teams and with retailers.
  3. Reinforce these with PK sessions, in-store promotional pieces, or SWAG (as examples). The messaging needs to be consistent. Support your retailers with simple, easy-to-understand features and benefits per product.


Tactical insights to become
a Cannabis Retail Insider!

Access expert insights in one easy-to-digest
and follow-along newsletter.

We hate SPAM. We will never sell your information, for any reason.