What is High-Low Pricing in Retail? Explained

High-low pricing is a retail strategy where a retailer initially sets higher prices for products but offers frequent discounts, promotions, or sales to attract price-sensitive customers. This approach creates a perception of value and encourages consumers to make purchases during promotional periods. High-low pricing aims to strike a balance between maintaining higher profit margins during regular periods and stimulating sales through temporary price reductions. While this strategy can attract bargain-seeking customers, it requires effective communication and strategic planning to avoid diluting brand value or frustrating customers who may feel misled if discounts become too frequent or predictable.