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They're using it as a loss leader: taking a cut in profit or even a loss to pull people into the store, where they're likely to buy more than enough to make up for it.

You would have to have some insider knowledge to know for sure because both options are possible. But regardless if something is a loss-leader or not I typically shop with the rule that any item that routinely goes on sale for $x has a true price of at most $x.

It's full price the rest of the week so that on Friday it looks like a good deal. How do you know what the actual value is? You only know its value from the price charged during the rest of the week.