With the 99 cent thing, if you sell a billion small items for $9.99 because our brains don't equate $9.99 to $10.00, you've made $10 BN. If you sell 500 items for $799.99 instead of $800 you've made $399,995. So you take a more noticeable hit in sales if you don't sell as many small items because they're now a $1.00 and people don't think they're worth a $1.00, but people are more likely to still buy an item that was $799.99 for $800. So you're less likely to lose sales.

In the US, that extra cent offsets tax which isn't included in shelf price which is part of the problem. But our prices are also rounded I believe. You did used to be able to buy things with pennies and it's still a legal currency. But it's been a long time since I've seen penny candy or similar and I couldn't tell you what they're used for now except exact change in the event that the seller is using psychological tactics to sell you more things by tricking your brain into believing you're paying less than you are.

First, no the shelf price is not altered.

Second the final price at the register is rounded to the closest 5 cent.

Some times you'll go up, sometimes you'll go down. It all breaks even in the end.