As revealed in The Grocer last month, supermarkets have been ramping up the savings offered to shoppers.

Our table of brands’ featured space promotions in the four weeks to 3 July shows an across-the-board hike in the value of the savings offered. On average, shoppers have been saving 34.1% on a promotion, three percentage points higher than during the same period in 2010, according to analysis from Assosia.

The increase has been driven by branded activity, with the average savings on brands 3.3 points higher year-on-year, compared with 1.6 for own label. The greatest growth in savings came from brands Nestlé (8.9 points), McVitie’s (7 points) and Walkers (6.8 points). By category, the largest increases have been in chilled food (6.3 points) and chilled dairy (five points).

And although total average savings have fallen 0.8 points month-on-month, accompanied by a drop in the savings offered by some of the top 10 brands, this was not the start of a downward trend, said Assosia MD Kay Staniland. “The focus is upwards generally and it could be only a few lines bringing the average down,” she argued.

In terms of numbers of promotions, the biggest hike was from Budweiser, which ran 64 offers the majority x-for-y deals compared with 33 the previous month.

Budweiser’s activity reflects a wider shift to x-for-y deals, which made up 28.7% of featured space promos a year ago, but in June 2011 contributed 34.4%. Meanwhile, the number of ‘half price’ and ‘extra free’ deals is down.

This was partly the result of declining brand loyalty as shoppers opt for products on deal rather than their usual brands, said Staniland. “A combination of this and a change in promotional cycles means that, by offering x-for-y deals, you can entice the shopper to buy a greater quantity of your products and use them over a longer period,” she said. “Then, when they run out, the chances are the brand will be back on promotion.”

Looking at promotions by category, the impulse market showed the biggest hike, with its share of featured space promotions rising four percentage points to 19%. This was driven by a rise in the number of brands running promos, from 86 last year to 118. “Even taking into account some brands or SKUs appearing in more than one location in store, the number of brands promoted has grown,” said Staniland.

Published in The Grocer, 09 July 2011

http://www.thegrocer.co.uk/home/topics/prices-and-promotions/brands-capitalise-on-x-for-y-as-savings-increase-vs-2010/219422.article

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