UK retailer Sainsbury's move to favour consistently lower prices over 'supplier arrangements' has seen the supermarket giant's income fall from £639 million to £371 million in one year, reports The Telegraph.
Supplier payments include money a supplier pays stores to have their products promoted. Sainsbury's told the paper that it was a "conscious decision to move away from supplier arrangements and toward a reduction in the base cost of goods".
Sainsbury's food commercial director, Paul Mills-Hicks, told The Telegraph, "By replacing multi-buy promotions with lower regular prices, we are making it easier for customers to buy the products they need, in the quantities they need, without having to buy multiple items."
The paper noted that offers such as, 'Buy one, get one free', can confuse shoppers and also promote waste.
According to Kantar Worldpanel, "the short-term result of shifting its promotional emphasis from multi-pack deals to straightforward price cuts", explains the 1.2pc fall in sales the grocer has suffered in the 12 weeks to May 22.
Sainsbury's claims to be the first major retailer in the UK removing multi-buy deals from its stores, the majority of which will be implemented by August, according to The Telegraph.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Aoife Lawless. To subscribe to ESM: The European Supermarket Magazine, click here.
