Supermarkets up spend to fight dip

tesco.mns miniThe UK’s major supermarkets have boosted their marketing spend by 14% during the past month – compared to the same period last year – as they try to combat declining sales.
Driven by Morrisons, TV and press advertising spend by the 10 leading supermarkets rose 13.8% year-on-year to £28.3m. Morrisons was the highest spending food retailer on TV and press (£5m), followed by Tesco (£4m) and Asda (£3.7m). Iceland had the biggest year-on-year increase in spend (up 426% to £2.2m) followed by the Co-operative (up 167% to £2.1m).
However, the figures – supplied by Nielsen – found that the rise has had little impact on sales, with aggregate sales value growth during the four weeks ending October 12 were up just 1.8% year-on-year.
The strongest category growths were in the heavily promoted categories of confectionery (up 8.6% value year-on-year) and soft drinks (up 4.9%), the latter being helped by September’s warm weather. The weakest growth was reported in packaged grocery ( down 0.1%) and household ( up 0.3%) – both areas where discounters are building market-share.
The report noted: “The weak sales growths are indicative of consumers being reluctant, unwilling or unable to spend – despite their slightly more optimistic outlook in recent months. Consequently, to encourage sales, in-store promotional spend is being maintained at 35% of sales, with particularly high levels at Waitrose (41%) and Morrisons (40%).”
It added: “On the back of its significant increase in media spend, Iceland has continued a gradual gain in market share, despite industry-wide softness in the frozen food category where value growths of +0.7% remain lower than overall inflation.
“Sainsbury has also increased market-share and strengthened its position as the overall number two retailer across the industry. Retailers will be hoping the recent rise in consumer confidence translates into increased shopper spend and more encouraging figures for Christmas and 2014. But to drive sales in the meantime, we anticipate they’ll continue increasing ad spend to support their Christmas campaigns and promotions.”

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