1. Client Overview

• Industry: Hardware, DIY, and Trade Building Supplies Retailer
• Business Size: Over 80 independently owned stores, ~$1.3B in annual revenue
• Location: Nationwide coverage across New Zealand with consumer and trade-facing operations
• Client Context:
  Mitre 10 New Zealand operates as a cooperative group with strong local market autonomy. While stores serve both retail consumers and trade professionals, inconsistent pricing methods, legacy systems, and a lack of national pricing governance created significant margin leakage, operational inefficiencies, and reputational inconsistency in pricing.

2. Challenge / Problem

• Symptoms Observed:
  
  • Cost-plus pricing logic dominates across many categories, particularly in trade-focused SKUs
  • Inconsistent execution of markdowns and promotional discounts across stores
  • National and local price misalignment causing confusion and margin erosion
  • Poor pricing visibility at store level—teams lack confidence and tools to defend or explain pricing
  • Rebate structures and supplier price increases poorly tracked and not always passed through in a timely way
• Strategic Impact:
  
  • Stores absorbing price increases, leading to below-cost sales in high-volume products like timber, plumbing, and hardware
  • Lost EBIT across discretionary and project-based purchases due to discounting defaults
  • Customer perception of inconsistent pricing eroding trust—especially among trade accounts
  • Limited ability to run national pricing strategies due to fragmented capabilities and system constraints
• Internal Commentary:

“Our pricing is a mix of what the supplier recommends, what the system spits out, and what the local manager thinks will keep the customer from walking. It’s not strategic—it’s reactive.”

3. Objectives of the Engagement

• Benchmark current pricing capabilities across all 9 pillars of pricing strategy and operations
• Surface key drivers of margin loss at product, customer, and store level
• Establish alignment on a clear pricing ambition—shifting from cost-plus to value-based pricing where possible
• Build confidence and capability to execute price increases, manage markdowns, and defend deals in a structured way
• Equip store teams and head office with training, tools, and governance to support pricing performance

4. Our Approach

• Phase 1: Capability Diagnostic
  
  • 132 staff completed Pricing Insight’s diagnostic assessment
  • Average pricing capability score: 62%
  • Less than 10% of participants passed the pricing maths test (only 3 achieved a perfect score)
  • Identified significant variation in views on pricing authority, discount practices, and promotional ROI
• Phase 2: Strategic Workshop
  
  • Conducted pricing workshops with national leadership and store operators
  • Mapped challenges in override behaviour, customer pricing inconsistency, and product misclassification
  • Developed alignment around moving from legacy pricing culture to structured governance and value communication
• Phase 3: Execution Toolkit
  
  • Delivered playbooks and SOPs for price setting, override thresholds, discount approvals, and margin analysis
  • Designed margin dashboards and analytics frameworks for store-level visibility
  • Initiated a national price architecture project across key categories (timber, seasonal, garden, plumbing)

5. Key Actions Taken

6. Results Achieved (Within 12 Weeks)

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7. Client Feedback

“We now know where we’re leaking margin—and we’re finally doing something about it. It’s not about raising prices blindly, it’s about setting the right price and giving our team the confidence to stick to it.”
— Commercial Director, Mitre 10 New Zealand

8. What This Means for Similar Companies

Retail and trade hardware chains with local autonomy often struggle with pricing alignment, discount discipline, and system fragmentation. Mitre 10’s journey demonstrates how even in a decentralised model, structure, data, and training can unlock millions in lost margin—without damaging customer loyalty.

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