The level of consumer spend on promotions in UK supermarkets is now at its lowest level for 11 years, according to data released by Nielsen.
The research firm found that in the four weeks ending 25 March 2017, just over a quarter (26%) of spend at UK supermarkets was on products offering temporary price cuts or multibuys, which was the lowest level recorded since 2006.
A reduction in promotional spend is taking place across all categories, however it is more pronounced in private label, where just 18% of spend was on promotional items, last year, than branded goods (41%).
Before The Crisis
“The level of promotional spend has gone back to levels not seen since before the 2008/09 economic crisis,” said Mike Watkins, Nielsen’s UK head of retailer and business insight.
“The last few years have seen about a third of the typical supermarket shopping bill going on promotional items. However, to be more price competitive, supermarkets have turned temporary price reductions into permanent cuts, so there’s less promotional activity as many prices are cheaper all-year round."
Watkins also noted that there has been a shift away from promotional devices like multibuys to "simpler price cuts, which is in tune with shopper needs to make it easier to manage their basket spend".
Spend Down
According to Nielsen, year-on-year spend at UK supermarkets in the four weeks to 25 March fell 2.6% compared to the same period last year, due to Easter taking place later this year.
It found that Aldi (+12.6% on the same period last year) and Lidl (+10.5%) were the best performing grocers in the period, followed by Iceland (+5.2%) and Marks & Spencer (+2.6%).
“Looking ahead, supermarket growth will come from exploiting the “little and often” shopping trend , product innovation including private label and food to go, as well as maximising sales during seasonal events such as Easter,” said Watkins.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine
