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Supermarkets: Promote at your peril!

Price discount promotions, multi-buys, buy one get one free or everyday low price (EDLP)?

The plethora or price and promotional options on display on supermarket shelves are contributing to an erosion in consumer trust, a BBC article reports.

Ever since the 2008 recession, ever-more price conscious and savvy consumers, have permanently changed their shopping habits, searching out the best value for the products they want in the market place. This change led to a growth surge for retailers such as Aldi and Lidl, who operate a extremely simple and lean organisation which can offer consumers good value at an everyday low price.

This has caused the longer established retailers, to review their price offerings to try and keep their customers happy and more importantly shopping with them. Although multi-buys are still an important promotional mechanic for holding up volume, encouraging customers to buyer more, there has been a surge in EDLP pricing, to emphasis low prices everyday. One example is Sainsbury's who at a corporate level have moved away from multi-buy mechanics, towards EDLP.

That said, it varies between category. Some categories such as fruit and veg predominantly work better at EDLP, whereas some categories such as single bottles and cans of beer & cider, can work better in a multi-buy mechanic, as the consumer may prefer to 'mix & match'.

Whichever strategy the retailers go for, it is becoming more and more apparent that 'value for money' is the leading consumer need, and misleading promotional deals to try and maximise retailer margin, will only lead to lost shoppers. Ignore this point at your peril.

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