Sainsbury's trading director Mike Coupe told delegates at IGD's Sainsbury's trade briefing this week that shoppers had responded well to last year's promotions and the retailer had no intention of emulating Asda's strategy this year.
The recession prompted a massive increase in special offers in 2009, with Assosia data showing Sainsbury's increased its deals by 44.5% in the 12 months to 6 March 2010, more than any other retailer. Asda followed closely, with promotions up 44.2% in the same period.
The promotions had proved a major sales driver for Sainsbury's, Coupe said. Half-price deals on aisle ends, supported by large signage, had been particularly effective, he added, and the favoured mechanic for the year ahead would be price cuts rather than bogofs or 'two for' deals.
"Sainsbury's wants to stay away from 'two-fors' because price perception is crucial," said one supplier. "It has improved price perception a lot with its Basics range, but it needs to make sure it doesn't give the impression it is more expensive than its rivals. If consumers get to the checkout and they have spent a lot, it increases that perception. So it's all about price cuts to maintain a lower overall basket spend."
The supplier added that although Asda intended to cut back on promotions and return to its Every Day Low Price roots, it would undoubtedly continue to participate if a brand decided to offer a universal promotion across all retailers. "They are going to have to continue to play the game," he said. "The UK consumer is a promotional junkie."
Another supplier confirmed price cuts were the favoured mechanic, and added that Sainsbury's strategy of issuing coupons at the till, which was introduced last year, had also been successful in targeting specific consumers with deals that would appeal to them.
"Over the past their promotions have been better targeted, and Sainsbury's would do more if they had room in store," he said. "The key factor is the bill at the checkout."
A Sainsbury's spokesman said: "We aim to keep offering our customers a targeted mix of promotions that are relevant to them."
According to Assosia data, straight price cuts account for nearly 40% of all promotions across the major supermarkets, while half-price deals are up on last year, accounting for 16.2% of all promotions. Meanwhile bogofs have fallen out of favour, accounting for just 4.4% of deals less than half the figure at this time last year.
Tesco and Morrisons have not yet revealed their promotional strategies for the year ahead.