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Promo Dynamic – Promotions growth comes to a halt for the first time in months

The Grocer

What appeared to be a relentless increase in activity on the gondola ends of UK supermarkets came to a screeching halt this month. Britain’s top five retailers ran fewer featured space promotions in the four weeks ending 22 September than in the same period a year ago – the first time year-on-year activity has fallen in almost 12 months. And the total number of featured space promotions across the market rose just 0.1% to 11,174 month-on-month, too.

This summer had already brought signs suppliers were feeling the pressure of maintaining high levels of deals. Many had reduced the savings offered by favouring x-for-y deals and straight money-off over bogofs and half-price discounts. In the past month, the average saving offered to shoppers has dropped from 33.3% a year ago to 32.3% this month.

Some brands were maintaining higher levels of savings, but might not be able to for long, said Kay Staniland, MD of retail analysts Assosia, although she added that the year-on-year decline in the number of promotions followed exceptionally high numbers this time last year, with Coca-Cola in particular slashing its spend. “We’d just finished the Olympics and were hosting the Paralympics. Retailers were probably getting rid of some stock they had over.”

Some suppliers may be reining in spend, but that hasn’t delayed them getting the festive promotional snowball rolling. Chocolate tins, Advent calendars and biscuit selection boxes have been piled up in many stores over the past month.

Accordingly, the big confectionery players all increased activity compared with the previous four weeks. Halloween lines – particularly bags of sweets – are also taking plenty of featured space.

Month-on-month hikes by Cadbury, Nestlé and Mars have been fairly modest but are in contrast with the overall trend. Compared with this time last year, however, it’s Nestlé – of the big three confectionery giants – that’s making the biggest play right now, with a big push on half-price offers, while Cadbury is cutting right back.

Published in The Grocer, 01 October 2013

http://www.thegrocer.co.uk/home/topics/promotions-growth-comes-to-a-halt-for-first-time-in-months/349902.article?redirCanon=1