That is the title of a recent Financial Times article. But is it true?
The article begins by stating that French-based Carrefour’s sales have declined due to a difficult economic climate in Europe. The price cuts referred to in the headline didn’t appear until late in the article where the reader discovers that those cuts were made over a year ago.
The author goes on to say that Carrefour’s finance chief said that the price cuts were made in lieu of the deep discounts offered on "sale" items. The rationale for lowering prices rather than using deep discount sales is that those sales were skewing buyers' price perception. Imagine that.
The explanation that the European economy is the primary cause makes a great deal of sense given the austerity measures that many of the countries in the European Union have put into place to deal with their burgeoning debt crisis.
Attributing lost revenues to lower prices doesn’t make sense unless prices were lowered below the level of the deep discounts previously offered. While that’s possible, it’s highly unlikely. I doubt that Carrefour’s leadership, who are required to report revenues and profits publicly, are going to make their lives more difficult by accelerating revenue and profit declines through excessively lower prices.
It’s not my intent to bash a fellow writer for his/her approach to writing. I use misdirection in my headlines to pique readers' interests and entice them to read my article/blog post.
What I want to point out to you, as readers, is that you need to question the premise of whatever claim is being made. Trust your instincts and the knowledge you have of current economic conditions to see whether or not the author’s claims make sense. In this instance the cause/effect relationship between lower prices and lower sales doesn’t make as much sense to me as the general state of the European economy.
Challenge everything you read! And, yes, that applies that to my writing as well.
Dale Furtwengler is a professional speaker, author and business consultant. His latest book, "Pricing for Profit," is dedicated to helping organizations break the bonds of industry pricing.