Breakfast cereal suppliers’ margins will have been hurt by an intensification of price and promotional-based activity that took place last year.
Cereals is one of the biggest categories in store, reflecting a high market penetration and diverse consumer choice. The average multiple stocks around 139 skus, with 10% of products on promotion.
As is often the case, Sainsbury has the widest range of products on shelf. And with 15% of the category on promotion in February, it has significantly more lines on offer than the sector average of 10%. This is a category that’s heavily shopped in Sainsbury, with peak-time availability issues affecting nearly 22% of promotional lines and 16% of normal lines.
Asda also struggles to fulfil peak-time demand. We recorded 15% of normal lines and 20% of promotional lines at risk of being out of stock. Asda has only 8% of skus on promotion, although its EDLP positioning will mean low prices across the category.
Tesco has a similar depth of range to Asda and a similar number of products on promotion but maintains a higher level of availability - 15% of promotional lines and 10% of standard lines at risk.
Safeway shoppers have two-thirds of the choice that the big three multiples offer and, at 5%, the lowest proportion on promotion. In Safeway’s case, fewer offers often translate into lower category sales and we found only 11% of lines not on promotion and 14% of skus on promotion were at risk during busy times.
This leaves Somerfield and Morrisons, which have little separating them in this category. Each has about 10% of skus on promotion - the sector average - and the fewest products at risk.
Morrisons focuses on keeping products on promotion well stocked, with only 8% at risk. That drops to 14% for non-promotional lines.
While it is likely Somerfield’s cereal sales per store will be behind the big four retailers, it nevertheless delivers the best combined results this month, with only 8% of normal lines and 12% of promotional lines at risk of poor availability.