The supermarkets’ reliance on promotions to shift volume has reached a new high.
Data from Neilsen shows 40% of all sales came from items on promotion – a record for the sector.
“Shoppers are responding well to powerful promotions and we are seeing 40% of all sales now on promotion, an all-time high,” said Mike Watkins, senior manager of retailer services at Nielsen.
“We envisage that shoppers will continue to indulge in Mothers Day and Easter promotions, but will cut back in the following few weeks in order to balance their household budgets.
“Indeed despite the increased spend on promotions, growth almost halved in the past four weeks to 2.0% compared to February and volume growths are flat.”
He added: “Shoppers are really feeling the pinch with falling disposable income as the increase in VAT, combined with wage freezes, increasing utility bills and fuel costs are putting considerable pressure on household budgets and this is now starting to impact supermarkets which have so far proved resilient to such economic factors.”
The news comes after data from Kantar Worldpanel today showed the discounters continuing to grow their share of the market, with Lidl posting its best-ever performance in the rankings. Frozen specialists Iceland and Farm Foods also showed robust sales growth well ahead of the major supermarkets.
Cash-strapped shoppers slam brakes on grocery growth (29 March 2011)
Fmcg promotions hit all-time high (12 October 2010)