Easter’s hot weather and the Royal Wedding impinged on promotional space in April, but the savings offered have been better. Size might not matter in every walk of life but it certainly has an impact on promotional activity.

One of the reasons for the 13.4% month-on-month drop in the number of promotions recorded in the four weeks to 8 May was an increase in the physical size of products on offer.

The hot weather meant bulky items such as garden furniture, barbecue charcoal and beer were given precedence over other lines in featured space, with the total number of beer and lager offers up 6.2% on the previous month. “Beer and lager will take up considerably more space than other products so while you may normally get 10 lines on promotion on a gondola end, you will get fewer if it’s full of 24-can cases of beer,” said Kay Staniland, managing director of promotions analysts Assosia.

The unexpected sunshine also brought some hurried changes in promotions. “Although main promotional ­activity is usually scheduled many weeks in advance, the good weather across the full two weeks of bank holidays made for many last-minute changes and shifting of space and promotions,” added Staniland. Sudden demand for products such as sun cream encouraged retailers to stock them in space normally given over to promoted items. And the sun took its toll on confectionery deals, with the big confectioners showing a marked drop in activity as retailers swapped out Easter eggs and other confectionery lines for alcohol and seasonal products. Kate and Wills also had an impact, with wedding merchandise such as flags and mugs taking up featured space.

But while the number of promotions has dropped, the savings being offered have risen in virtually every part of the stores. Across the top 10 most-promoted brands this month, only one Fox’s biscuits was offering a lower average saving than a year ago. The greatest increase in savings were from Mr Kipling (14%), Walkers (11.1%) and Nestlé (9.3%). Looking at individual categories, the largest hike in average savings were in pet care (7.6%), household and impulse (both 6%).

“The constant battle to be cheapest, and the current and ongoing fight between the retailers, is forcing the offers to be as low as they can be,” said Staniland. “While starting prices may have to increase due to inflation and other factors on some lines, when ­promoting they need to be as ­competitive as possible.”

Published in The Grocer, 14 May 2011


Read all Articles