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Promo Dynamic – Waitrose ramps up its deal activity, acting on impulse

The Grocer

Waitrose is eating into the gap in deal numbers between itself and the big four. The retailer upped its deals in the four weeks to 11 September by 34.5% month-on-month and was the only one to increase its year-on-year activity, by 15.1%, according to Assosia.

Its escalation in activity took it past the 1,000 deal mark and although it was still massively adrift of the others, the gap was noticeably less than in recent months, the number of deals it ran equating to 63% of Tesco’s total compared with 52% the month before.

Its promotional push coincided with the instalment of bigger signs to advertise deals in-store and wider gondola ends. “Waitrose needs to be more competitive and ‘obvious’ in its promotions and deals,” said Kay Staniland, MD of retail analysts Assosia. “The other retailers are pushing their premium own label lines, which is essentially what Waitrose has always been. So by introducing more promotions and branded offers it is trying to even the playing field slightly.”

The retailer has increased its focus to impulse deals, doubling its offers in the category from 10.8% last year to 20.2% this. It has also made greater use of the ‘x for y’ mechanic and less of ‘save’. Waitrose’s decision to increase its year-on-year activity was in marked contrast to the tactics deployed by Asda and Morrisons, which both ran almost 25% fewer deals. Deals were also down at Sainsbury’s and Tesco on last year.

However, this did not mean retailers were reducing the amount of space they were devoting to promotions, said Staniland. It was just that they were giving big brands more prime space rather than showcasing a range of products.

“They are potentially working with the bigger boys more,” she said. “It’s also down to money featured space ends and prime promotional space cost money and the retailers are using that to their advantage.”

The signs are that promotional activity is being ratcheted up again, even if they are some way off last year’s numbers. With the exception of Morrisons, promotions at all the other supermarkets increased by double-digit percentages month-on-month.

In terms of category focus, there has been a shift from wine to beer and lager. There were also big year-on-year changes in the choice of promotional mechanics, but little consistency between the mults. For example, Asda made a big shift towards ‘save’ while Tesco moved away from ‘save’ to ‘half price’.

Published in The Grocer, 17 September 2011