Supermarkets have dramatically changed their promotional tactics in response to the economic downturn, reveals exclusive research carried out for The Grocer.
They have slashed the number of branded lines on promotion in high-value featured space by 16% in 2008 compared with 2007.
Some have given their own-label lines a significantly greater share of prime space, according to the figures compiled by promotions tracker Assosia. Asda has increased own-label products in this space from 13% of the total in October 2007 to 20% this year, for instance.
"The supermarkets have faced a real dilemma this year," said Assosia MD, Kay Staniland. "They've really wanted to promote their own-label ranges, and in Tesco's case their new discount brands. Since these are cheaper products - not reduced ones - they don't count as promotions. But featuring them like this has meant reducing the amount of featured space they sell to branded suppliers, which was a real money-spinner. A lot of branded promotions are still there, just less prominent."
But in stark contrast to a Which? report claiming supermarkets were exaggerating the size of their discounts, Assosia's analysis of more than 4,900 deals in October shows average discounts have substantially increased year-on-year. The average branded promotion now offers a £1.88 saving, up from £1.62 last year. The typical own-label reduction is now £1.15, up from 88p. Discounts and half-price offers have overtaken multibuys as the promotional mechanic of choice.
Alcohol has increased its share of promotional space this year and now comprises almost a fifth of all featured space deals. Wine has overtaken beer as the most-promoted liquor, with the typical saving up from £3.01 in 2007 to £3.69 in 2008.
"These figures show how competitive grocery retail has become," said one senior executive. "Wine and beer is a major driver of footfall: people will switch retailer for the right deal."
They have slashed the number of branded lines on promotion in high-value featured space by 16% in 2008 compared with 2007.
Some have given their own-label lines a significantly greater share of prime space, according to the figures compiled by promotions tracker Assosia. Asda has increased own-label products in this space from 13% of the total in October 2007 to 20% this year, for instance.
"The supermarkets have faced a real dilemma this year," said Assosia MD, Kay Staniland. "They've really wanted to promote their own-label ranges, and in Tesco's case their new discount brands. Since these are cheaper products - not reduced ones - they don't count as promotions. But featuring them like this has meant reducing the amount of featured space they sell to branded suppliers, which was a real money-spinner. A lot of branded promotions are still there, just less prominent."
But in stark contrast to a Which? report claiming supermarkets were exaggerating the size of their discounts, Assosia's analysis of more than 4,900 deals in October shows average discounts have substantially increased year-on-year. The average branded promotion now offers a £1.88 saving, up from £1.62 last year. The typical own-label reduction is now £1.15, up from 88p. Discounts and half-price offers have overtaken multibuys as the promotional mechanic of choice.
Alcohol has increased its share of promotional space this year and now comprises almost a fifth of all featured space deals. Wine has overtaken beer as the most-promoted liquor, with the typical saving up from £3.01 in 2007 to £3.69 in 2008.
"These figures show how competitive grocery retail has become," said one senior executive. "Wine and beer is a major driver of footfall: people will switch retailer for the right deal."
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