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Asda and Sainsbury’s lead in cutting down on deals

The Grocer

With Asda and Sainsbury’s looking to merge, there are questions over whether the retailers’ different cultures will fit together.

Certainly, the two retailers have proven themselves dissimilar with it comes to promotions, with each favouring different mechanics.

“Both historically and currently Sainsbury’s promos have always been very save-focused in contrast to Asda, which values x for y promos for 21% of activity, although usage has dropped over the past year,” says Kay Staniland, Assosia director.

There is one area of agreement, though. Both retailers are choosing to run fewer deals overall.

In the most recent four-week period, both Sainsbury’s and Asda made sharp cuts to their total number of offers, with a 13.4% month-on-month reduction at Sainsbury’s and Asda offering 6.5% fewer deals.

Asda made its deepest cuts to multibuys and x for y: they are both down 13.7% month on month, while single price cuts have gone up by the same amount. Meanwhile, Sainsbury’s has shaved off 6.7% on half-price offers and increased save offers by 8.5% [Promo Dynamic Retailers 4 w/e 13 May 2018].

“Although average pricing and type of promos appear at odds in Asda and Sainsbury’s, the merger of these retailers appears achievable given their compatibility in promotional activity and product split between branded and own label,” says Staniland.

She adds the drops in overall offers represent “a trend – both yearly and monthly – within the majority of the big six grocers”. Indeed, all mults other than Tesco (up 0.8%) have reined in their offers, though none has done as much as Asda and Sainsbury’s. Morrisons is down 2.3% month on month, Waitrose has made a 1.3% cut and Co-op is down just 0.3%.

Published in The Grocer, 25 May 2018