4 ASX Consumer Stocks Showing Pricing Power
When household budgets come under pressure, not every business is affected in the same way. Some companies struggle to pass on higher costs, while others manage to protect margins without losing customer trust. This difference often comes down to one crucial factor: pricing power.
Pricing power is the ability of a business to hold prices steady or increase them gradually while keeping demand intact. It usually comes from strong brands, essential products, loyal customers, or differentiated experiences. On the ASX, several consumer-facing companies continue to demonstrate this quality across different spending categories.
This blog takes a long-term view of four ASX-listed consumer stocks that have shown pricing power through their business models, customer behaviour and operating strategies: Coles Group, Universal Store Holdings, Harvey Norman Holdings, and Collins Foods.
Understanding Pricing Power in Consumer Businesses
Pricing power is often misunderstood as simply charging more. In reality, it reflects a company’s ability to manage price, cost and demand together. Businesses with pricing power usually share some common traits:
- Customers return even when prices move higher
- Products or services feel necessary, trusted or distinctive
- Price increases are gradual and well-absorbed
- Discounting is controlled rather than constant
According to Australian Bureau of Statistics data, consumer spending tends to shift rather than disappear during periods of cost pressure. Shoppers trade between brands, formats or categories, which benefits companies that offer value across different price points.
Let’s look at four companies that have managed pricing decisions carefully across their respective segments.
1. Coles Group: Pricing Strength in Everyday Necessities
Coles Group operates one of Australia’s largest supermarket networks, serving millions of customers each week. Food and household items remain essential purchases regardless of economic conditions, which provides a natural foundation for pricing power.
Coles demonstrates pricing strength through its product mix. The company balances national brands with a wide range of private-label products, allowing customers to trade down within the same store rather than leave altogether. This keeps basket sizes stable while protecting margins.
Data from industry reports shows that private-label penetration in Australian supermarkets has increased steadily over the past decade, supporting retailer control over pricing and costs. Coles benefits directly from this trend.
Another factor is convenience and loyalty. Supermarkets with strong local presence and established shopping habits tend to retain customers even when prices move incrementally. For Coles, pricing adjustments are often subtle, spread across categories, and supported by promotions that reinforce value rather than cheapness.
This approach helps Coles maintain pricing flexibility without disrupting customer trust.
2. Universal Store Holdings: Brand-Led Pricing in Youth Retail
Universal Store operates across fashion, footwear and lifestyle brands targeted at younger consumers. This segment is often seen as price-sensitive, yet Universal Store has managed to maintain pricing discipline better than many apparel retailers.
The key driver is brand relevance. Universal Store stocks labels that resonate with youth culture, including streetwear and lifestyle brands associated with identity rather than necessity. When customers feel connected to a brand, price becomes one of several decision factors rather than the only one.
The company also benefits from frequent product refresh cycles. Shorter fashion lifecycles allow prices to reset regularly, reducing the need for heavy discounting. Inventory management plays a major role here, as better stock turnover limits margin erosion.
Industry data shows that retailers with high inventory turnover typically experience stronger gross margins over time. Universal Store’s ability to manage stock efficiently supports stable pricing and reduces reliance on clearance sales.
3. Harvey Norman Holdings: Value-Based Pricing in Big Purchases
Harvey Norman operates across electronics, furniture and home appliances. These are higher-value purchases where consumers tend to compare features, service and reliability rather than price alone.
Pricing power at Harvey Norman comes from the overall purchase experience. Many customers place importance on delivery, installation, warranty support and in-store advice. These services create value that supports pricing integrity.
Another advantage is product range diversity. Harvey Norman sells everything from entry-level appliances to premium home entertainment systems. This allows customers to adjust spending within the store rather than abandon the purchase entirely.
Data from retail surveys indicates that consumers buying durable goods often prioritise reliability and after-sales support over small price differences. Harvey Norman’s business model aligns well with this behaviour.
By focusing on service, bundled offerings and brand partnerships, the company maintains flexibility in pricing even during slower demand cycles.
4. Collins Foods: Pricing Discipline in Quick-Service Dining
Collins Foods operates well-known quick-service restaurant brands across Australia and Europe. Food service is highly competitive, with customers quick to switch if prices feel unfair. Despite this, Collins Foods has shown the ability to manage pricing without undermining demand.
One reason is brand consistency. Customers expect familiar taste, portion size and quality when visiting established quick-service brands. This predictability builds trust, which supports gradual price adjustments.
Menu innovation also plays a role. Introducing new items or premium options allows the company to lift average transaction values without raising prices across the entire menu. This strategy is commonly used across the global quick-service industry.
According to global restaurant industry data, menu mix improvements often contribute more to revenue growth than base price increases. Collins Foods benefits from this dynamic through selective product development and local pricing calibration.
What These Companies Have in Common
Despite operating in different consumer segments, these four businesses share important characteristics:
- Clear value propositions
Each company offers something customers recognise and are willing to pay for, whether essentials, style, service or convenience. - Pricing flexibility, not aggression
Price changes are measured and supported by product mix, service or brand strength. - Customer retention focus
Rather than chasing volume at any cost, these companies prioritise loyalty and repeat spending. - Ability to absorb cost pressures
Operational scale, sourcing efficiency and margin buffers allow pricing decisions to be strategic rather than reactive.
Why Pricing Power Matters Over the Long Term
Pricing power acts as a stabiliser across economic cycles. When input costs rise or consumer sentiment weakens, companies with pricing power are better equipped to protect margins and reinvest in their businesses.
For long-term investors, pricing power often signals durable competitive advantage. It reflects not just what a company sells, but how well it understands its customers and manages trade-offs between price, volume and value.
The Quiet Strength of Consumer Leaders
Consumer stocks are often judged by short-term sales trends, but the deeper story lies in how businesses manage pricing when conditions change. Coles, Universal Store, Harvey Norman and Collins Foods each demonstrate pricing power in different ways, shaped by their markets and customer relationships.
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