The value of British supermarket sales rose 1.4% in the 12 weeks to 26 March, but promotional activity fell to its lowest level for 11 years as retailers like Sainsbury’s cut back on multi-buy offers, according to research from Kantar Worldpanel and Nielsen.
Slower year-on-year growth is primarily down to Easter falling later this year, but according to Kantar Worldpanel’s head of retail and consumer insight, Fraser McKevitt, there were still positive signs for some categories.
“Despite rising prices, we’ve seen shoppers’ minds turn to healthy eating after the excess of the festive period and before the temptation of Easter. Greater demand for gluten or dairy-free products, particularly from younger shoppers, has boosted the ‘free from’ category by 36% year on year. In fact, 54% of the population purchased a ‘free from’ product during the past three months – that’s 3.3 million more people than last year.
“Meanwhile inflation shows no signs of abating. The price of everyday goods is up by 2.3% compared to this time last year, and rising prices cost the average household an additional £21.31 during the past 12 weeks.
“We expect inflation to continue to accelerate, and as a result we’re likely to see consumers looking for cheaper alternatives.”
There has been calls for multi-buy promotions on unhealthy food to be scrapped, and supermarkets like Sainsbury’s and Tesco have recently scaled back buy-one-get-free and two-for-one discounts as the nature of consumer spending evolves.
Nielsen data shows that 26% of spending in UK supermarkets went on products with temporary price cuts or multi-buy offers – the lowest level since 2006.
The reduction in promotional spend is happening across all categories but is much faster in supermarket’s own or private label spend than among sales of branded goods (41%).
“The level of promotional spend has gone back to levels not seen since before the 2008/09 economic crisis,” observes Mike Watkins, Nielsen’s UK head of retailer and business insight. “The last few years, have seen about a third of the typical supermarket shopping bill going on promotional items. However, to be more price competitive, supermarkets have turned temporary price reductions into permanent cuts, so there’s less promotional activity as many prices are cheaper all-year round.
“There’s also been a shift away from multi-buy to simpler price cuts, which is in tune with shopper needs to make it easier to manage their basket spend.”
Nielsen found that year-on-year takings at supermarket tills during the four weeks to 25 March fell 2.6%, as the timing of Easter negatively affected comparable sales.
© FoodBev Media Ltd 2017