Promotions accounted for more than 26.5% of multiple retailers’ turnover in the first half of 2008, an increase of half a percentage point compared with 2007, according to new Nielsen figures.
Over the past 12 months 40% of Somerfield’s turnover was driven by promotions – more than any other multiple retailer. Somerfield’s less-than-half-price offers also gives it the highest number of price reductions – they account for 52% of its promotional income.
Netto’s promotional sales went from 17% of its turnover in the year ending June 2006 to 23% in 2007, while Asda’s grew from 21% to 26% in the same period.
“With food inflation hitting 7% in June consumers are looking to save wherever they can and price reductions are proving very attractive,” said Danielle Tolson of Nielsen. “A recent Nielsen survey found that 76% of consumers try to save the pennies when food shopping, up from 45% last October.”
Tesco claims it has more offers on promotion than ever before and the money it generates as a result of them has increased from 25% of its income for the year ending June 2007 to 26% over the last 12 months. It is using fewer multibuy sales, such as bogofs, and switching more to straight discount offers.
In 2007 54% of the money it generated through promotions was through multibuy offers whereas that figure has dropped to 49% in the first half of this year.