Everyone tightens their belt in January, so it’s no surprise the number of promotions has fallen across the board compared with December.
Waitrose, Sainsbury’s and Morrisons were fairly restrained, cutting promos by 0.8%, 0.9% and 1.56% respectively. But Tesco and Asda went in hard. Tesco cut promotions by 8.5%, with Asda just behind at 7.6%.
Yet despite everyone scaling back the number of deals month-on-month, promo activity in general is still way up on last year. Of the major mults, only Asda - which has been paring back on promotions all year to strengthen its EDLP credentials - has run fewer, with promotions down 3.7% compared with January 2012.
But Asda is the exception. Waitrose has done the opposite, running a whopping 48.7% more promotions than it did this time last year, while Sainsbury’s is running 37.7% more, Tesco 30.8% more, and Morrisons is up 16.8%. But though they are offering more promotions, the supermarkets are spreading them increasingly thinly. Last year, shoppers were making an average saving of 35.8% - this year, that saving has shrunk to 32.1%.
Wholesale prices: Crude oil hikes push up plastic packaging
Stable crude oil prices and low demand caused plastics prices to fall last year, but now plastic packaging has once again risen to the top of our tracker, driven by recent crude oil hikes.
At £1,162.5/t, UK prices for LDPE are now 20.4% higher than a year ago, having risen by a further 1.2% over the past month. HDPE prices in the UK have reached £1,142/t this month - up 1.1% on the previous four weeks and up 11.2% year-on-year - with UK prices also up for other key packaging materials such as polypropylene (up 7.1%) and Kraftliner (up 3%).
However, despite the market having emerged from its winter break, when demand falls, aluminium alloy remains significantly cheaper year-on-year as the economic outlook of key European countries hits demand. Prices are currently £1,184.5/t - down 11.1% year-on-year and 3.4% cheaper than last month. Testliner and PET prices also remain below the levels of January 2012.
The numbers also show supermarkets are trying to lose that post-Christmas flab in their stores. Multibuy is the key promo in use as they look to shift excess stock, with the number of ‘x-for-y’ deals up 8.4% year-on-year across all mults and by 26.4% in Asda alone. It was the only mechanic to increase in popularity on a year-on-year basis.
Straightforward price cuts were scarce, with only Sainsbury’s and Tesco showing any appetite for ‘save’, while half-price promotions were down by 6.5% on average across all the supermarkets.
Asda was also the exception in terms of brand/own-label mix: it was the only top five for whom own-label promotions decreased.
In terms of categories, Asda launched a massive push on bakery, increasing promotions by 40.7%. And if any more proof were needed that the Christmas party is over, soft drinks and healthy fruit were promoted more than this time last year, while wine, beer and lager, and crisps, snacks and nuts were all promoted less.