Unit Pricing and the 30-Day Rule for Price Reductions: How ESL Helps

Price labelling can look simple, but for many stores it is a daily challenge. As well as the price itself, the shelf often needs to show a unit price, and when prices are reduced it must in many cases be clear what the lowest price was during the previous 30 days. In this article we cover the basics and how electronic shelf labels (ESL) can make the work easier.

This article is a general overview and not legal advice. The rules contain exceptions and details that may affect your particular store. In Sweden, the Swedish Consumer Agency (Konsumentverket) publishes guidance on price information. Read it, and contact the agency or a lawyer if you are unsure. Retailers in other countries should check the guidance from their own national authority.

What is a unit price?

A unit price is the price per unit of measurement, such as per kilo, per litre or per item. Its purpose is to let customers compare products in different pack sizes easily.

For many products, particularly in grocery retail, the unit price must be shown clearly next to the product. This often applies to both the regular price and the promotional price. When the price changes, the unit price also needs recalculating, and that is where mistakes easily creep in when it is done by hand.

Common unit pricing challenges

• The unit price is not recalculated when the regular price changes.
• Multi-buy offers such as "buy three, pay for two" produce a different unit price from the single-item price.
• Pack sizes change without the label being updated.
• Different stores in the same chain show different unit prices for the same product.

What is the 30-day rule?

Since the EU's so-called Omnibus Directive was implemented in Swedish law, through amendments to the Price Information Act (prisinformationslagen), specific rules apply when a store announces a price reduction. Put simply, when you advertise that a price has been reduced, you must also show the lowest price applied during a period of at least 30 days before the reduction.

The aim is to let customers see whether a reduction is genuine, and to prevent prices being raised shortly before a sale only to be "reduced" again.

The rule mainly concerns situations where the reduction is highlighted, for example with "now", "was", percentages or crossed-out prices. There are also specific rules, including for goods that perish quickly and for progressive price reductions. How the rules apply in a particular case should be checked against Konsumentverket's guidance.

Why is it difficult in practice?

To show the correct reference price, the store needs to know which price applied to each item over the recent period. That requires price history, which is rarely easy to access on the shop floor. With paper labels, someone also has to work out the right reference price, print a new label and put it up on time.

How electronic shelf labels help

ESL does not remove the responsibility for correct pricing, but the technology can make it much easier to follow your routines.

Unit prices calculated automatically

When the labels are connected to the till or ERP system, the unit price can be calculated from the price and pack size. When the price changes, the unit price on the shelf updates at the same time.

Lowest price in the last 30 days

Many ESL and ERP systems can store price history and display the lowest price from the previous 30-day period directly on the label when a promotion starts. This depends on the price data in the source system being accurate and the template being set up correctly.

Promotions on the minute

Promotions can be scheduled so that the label switches when the offer begins and reverts when it ends. That reduces the risk of an old promotional price being left on the shelf.

The same price across the chain

For chains, it becomes easier to show the same price, unit price and reference price in every store, because the information comes from the same source.

Clear templates

With electronic labels you can create fixed templates where the regular price, promotional price, unit price and lowest price in the last 30 days are always displayed in the same way. That keeps price labelling consistent and easier for customers to understand.

Practical tips for your store

• Start with the source system. Make sure there is a clear owner of price data and that price history is stored.
• Review the templates. Check that the unit price and reference price are clearly visible and the text size is legible.
• Test the promotion flow. Run a test promotion and check that the right details appear on the shelf, at the till and in any marketing.
• Document your routines. Decide how you handle exceptions, such as marked-down fresh produce or local price cuts.
• Follow up regularly. Spot-check the shelves and follow up labels that have not updated.
• Stay informed. Read Konsumentverket's guidance and keep track of any changes to the rules.

Common mistakes with price reductions

Many errors happen not because a store wants to mislead, but because routines fail to keep up. Some examples worth watching out for:

• The reference price is taken from the wrong period, for example from an earlier promotion rather than the regular price.
• The crossed-out price on the shelf differs from the one shown in the printed leaflet.
• The unit price reflects the regular price even though the promotional price applies.
• Promotional labels are left on the shelf after the offer has ended.
• Local markdowns in one store are made without anyone checking the reference price.

With clear responsibilities and a system that pulls the details from a single source, this kind of mistake becomes easier to avoid.

Remember your other marketing

The 30-day rule does not only apply to the shelf edge. If a price reduction is promoted in leaflets, on in-store screens, on social media or in the online shop, the information needs to be consistent. One advantage of managing prices and promotions in a shared system is that the same details can be used across several channels, such as both the shelf edge and digital screens.

How StoreIQ can help

StoreIQ installs electronic shelf labels that take prices directly from your till or ERP system. We help you design templates where the unit price and the lowest price in the last 30 days can be displayed automatically, and we test the flow with you before the labels go live.

We do not provide legal advice, but we make sure the technology makes it easy to display the information you need. Contact us to arrange a store visit and we will go through your systems and requirements.