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Sainsbury’s is phasing out all multibuy promotions by the summer as it continues to move to an every day low pricing model.
The retailer said this week it would remove the deals from across its entire grocery business by August as it looks to make it easier for customers to find better value with lower regular prices.
It has already reduced multibuys by more than 50% since last March, and said customers had responded well to the move. Key categories in which this activity has already taken place include dairy, canned and packaged goods, meat, fish and poultry.
Figures complied for The Grocer by promotions experts Assosia show multibuys accounted for 29.6% of its total promotional mix last year, compared with 33.8% in 2014. The figures show that all leading supermarkets and Co-operative Food reduced their reliance on multibuys last year. Asda currently has the highest proportion of this type of deal in its mix at 39.9%.
“Customer shopping habits have changed significantly in recent years, with people shopping more frequently – often seeking to buy what they need at that moment in time,” said food commercial director Paul Mills-Hicks.
“By replacing multi-buy promotions with lower regular prices, we are making it easier for customer to buy the products they need, in the quantities they need, without having to buy multiple items to enjoy great value. Since we started simplifying our pricing approach we’ve seen a much great variety of products in our customer’s baskets, signalling that they like the flexibility to make their own choices.”
Sainsbury’s marketing director Sarah Warby added: “Careful management of household budgets, a growing awareness of the cost of food waste and more health-conscious living has driven a trend away from multiple product purchasing towards more single item purchasing.”
“We have listened to our customers who have told us that multi-buy promotions don’t meet their shopping needs today, are often confusing and create logistical challenges at home in terms of storage and waste. The commitment we are announcing today will make it easier for customers to shop for the products they love, when and how they choose, safe in the knowledge that they are getting the best value for money all of the time.” As well has simplifying its in-store offer, The Grocer also understands it has been changing the way it deals with suppliers to facilitate the move. In recent communications between a Sainsbury’s buyer and a supplier, it is explained that Sainsbury’s is moving all fixed deals including all promotional funding into the cost of goods sold (COGS). Funding is being linked to volume rather than secondary space; and featured space would be devoted to the best products rather than allocated as a result of lump sum payments.
A spokeswomen for the retailer said: “We began talking to our suppliers about reducing promotional confusion about four years ago, and in September 2014 we started to simplify our promotional offers and introduce lower regular prices for our customers. This has been very well-received by our customers as it enables them to buy the products they want in the quantities they need knowing they are affordable every day. We have good relationships with our suppliers and have worked in partnership with them on this from the start. We don’t charge suppliers for secondary space or shelf positioning, and haven’t done for some years. We use our space to focus on what we know our customers want to buy at different times of the year.”
Published in The Grocer, 12 February 2016