Trial stores removing HFSS promotions ahead of the ban due to come into force next month have seen sales of some products fall by a fifth, according to new data.
Figures from retail data app Reapp, based on EPoS data from a range of leading brands, showed biscuits and HFSS chilled products were among those to see a 20% decline in sales year on year.
Reapp collected data from brands supplying 50 supermarket HFSS trial stores.
It tracked sales across a six-month period from March to September 2022 and found HFSS-compliant healthier categories brands had seen up to 10% growth.
But brands demoted from prime promotion locations and front of store as part of the trials had seen sales suffer.
“Our trial data of HFSS-compliant stores indicates non-HFSS compaliant brands in categories like biscuits and chilled are seeing up to 20% decline in sales compared to the same period last year,” said James Lamplugh, group sales marketing manager at Reapp, whose clients include Unilever, Kellogg’s and Innocent.
The news comes after last week’s revelation that the Tresury is reviewing its plans for a crackdown on promotions, sparking anger from health groups.
Lamplugh said the sales data provided a strong argument for backtracking on the plans, with the government’s own estimates predicting the HFSS clampdown could cost more than £1bn in lost sales.
“While anything that tackles obesity is a good thing, I don’t see HFSS going ahead now,” he said.
“The impact of lost sales volume for brands and the knock-on effect on VAT income for the government, at a time when we’re about to enter a recession, means stimulating growth must be prioritised.”
The findings follow a Southern Co-op trial revealed last week, which suggested compliance with the government’s HFSS scheme does not have an impact on overall profitability.
The trial, which began in March and took place over a 16-week period in Romsey, saw five stores with three different format types adapted to become fully compliant with the proposals.
Supermarket leaders have called for urgent clarity on the government’s plans, with the clampdown due to come into force in a matter of days.
“Retailers have already spent hundreds of millions of pounds changing stores to comply with new obesity legislation before 1 October,” said BRC director of food and sustainability Andrew Opie.
“They are understandably concerned by reports that it could be scrapped and would like clarity that the money they have spent has not been wasted at a time when their primary focus is holding down the cost of food for their customers.
“Supermarkets are keen to work with government to make a real difference in tackling obesity but this requires a coherent and comprehensive strategy that is targeted and avoids unnecessary costs.”
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