There has been no let-up in promotional activity over the past month, despite Tesco’s Big Price Drop and the supposed focus on slashing base price.
All the big four supermarkets increased the number of deals month-on-month in the four weeks to 9 October. The biggest monthly moves came from Asda and Morrisons, who ramped up promotional activity by 11.2% and 8.1% respectively, although deal numbers at both mults were down on last year.
At Tesco, where the Big Price Drop kicked in on 26 September, the pricing initiative has not led to any slackening on the promotional front. Deal numbers were up 4.4% month-on-month and 13% compared with last year.
As shoppers continued to home in on offers, supermarkets could not appear to just focus on base prices, said Kay Staniland, MD of retail analysts Assosia. “Despite headlines being all about everyday low prices, featured space promotions continue to increase as consumers focus on these areas,” she said. “It’s not an option for retailers to cut the number of promotions.”
The upshot over the past month has not just been more deals, but deeper promotions. Average percentage savings at Morrisons, Sainsbury’s and Tesco were up both month-on-month and year-on-year, although savings at Asda and Waitrose were down slightly.
In terms of promotional tools, the mults have been keeping it simple. Multibuy deals like x for y and bogof have taken a back seat in favour of individual save and half-price offers. The only exception was Waitrose, which upped its x for y deals 20.5% at the expense of save and half-price promos.
Last Thursday, Waitrose pledged to carry 1,000 offers each week as part of a marketing strategy dubbed ‘1,000s of ways to great value’. It had already increased the number of deals it was running to more than 1,000 in August/ September, and this has continued over the past month.
“Waitrose took a while to see the value of featured space promotions, which is showing nearly a 30% increase on the number of offers it displays in store year-on-year,” said Staniland.
Meanwhile, in terms of category focus, promotions on beer and lager increased the most. Led by Tesco, which increased its beer, wine and spirit deals 7.7% year-on-year, the number of beer and lager deals across the multiples rose 3%.
The push on beer came as deals on other drinks fell away. Offers on wine and carbonated drinks have dropped by 1.9% and 1.2% respectively.