The majority of buyers do not believe that price is the number one factor driving consumer demand, according to research by The Grocer.
While Asda and Tesco raised the heat in the supermarket price war at the start of this month by rolling out £167m-worth of cuts in one weekend, two thirds of our buyers’ reader panel said that consumers based purchasing decisions on other factors.
“Price is very important but the overall product offer is also key - consumers want a balance between quality, source and price,” said one buyer.
Our panel did agree unanimously that price still played a major part in
consumer choice as customers had come to expect lower prices because of Asda and Tesco’s activities, as well as the influence of the media.
When it came to making deals with a supplier, most buyers also believed that quality was just as significant as price.
“The most important point is the sales potential of a product - if the product has that potential, this then opens the door for conversations on price and promotions.”
One third of buyers, meanwhile, believed demand was still driven by price.
They said the big four had been forced into using price as the biggest battleground for market share.
Our buyers were split when it came to how much time they spent talking about price.
Half believed that they discussed price as much as before, but other buyers said other factors, including availability, service levels and promotions, were increasingly coming into play when it came to striking a deal. “Price will always be a consideration but availability of product is vital when you only have up to two minutes to engage your customer in any part of a store.”
Another said that because of the difficult trading conditions and raised competition, price negotiations were taking up more and more time.
No buyer believed health was an overriding issue for most categories, but one said: “For a limited number of customers, healthiness is the key.
“However, this is an area that is increasingly becoming more important.”
Another was of a similar opinion, but added: “Indulgence is also rising as consumers become more stressed, and value their treats.”
Fiona McLelland
Reader Panel: Buyers