Focus On Cereals
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Focus On Cereals January 2012
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With sales of key brands falling, the big cereal players are admitting that escalating promotional activity is no longer the way forward
No-one likes soggy cereal, but unfortunately that’s exactly how the category looks at the moment.
Although value sales have grown 4.2% year-on-year to £1.6bn, this is largely the result of the average price per kilo rising from £2.91 to £3.07. Volume sales have fallen 1.1% as Brits turn to alternative breakfast options such as yoghurt or cereal bars, and purchase frequency has also slipped, from 23.9 times a year to 23.1 [Kantar].
What makes the volume slump all the more worrying is that promotional activity has actually increased. The volume of total cereals sold on deal last year rose to 45.8% (from 41.7% in 2010) - and a whopping 59.6% (55.2% in 2010) for the top 10 brands.
This has ominous implications for brand loyalty and begs the question: should brands continue to push the promotional envelope or is advertising the better way to try and bowl consumers over?
