Retailers have been warned about the long term damage of the current wave of price promotions – even in these cash-strapped times – amid claims that shoppers no longer believe they are getting value for money.
The latest report by shopper research specialist Shoppercentric shows how consumers are reacting to promotions running in UK supermarkets and provides a warning to some – most notably Sainsbury’s – that consumers are wising up to their tactics.
Perhaps unsurprisingly the classic buy-one-get-one-free – the so-called BOGOF – remains the most popular promotion for UK shoppers, with coupons and vouchers making a strong return.
When it comes to what constitutes good value to UK shoppers, “Getting the most for the money I planned to spend” is the definition that scores highest (28%), with 25% defining ‘value’ as being about low, or lowest, price.
BOGOFs remain the most attractive promotion (for 76% of UK shoppers) but this is down from 79% in 2009. Money-off single items takes second on 66%, but again this is down from 69%. Vouchers and coupons have experienced the biggest increase in usage and replace multi-buys to take third place. Some 53% of shoppers use vouchers/coupons now – an increase of 6% since 2009.
The report also details the performance of each supermarket chain:
Tesco – Despite a problematic start to 2012, it remains the retailer most likely to be associated with good overall value by UK shoppers (42%). Its highest score on individual factors is for ‘good promotions’ (26%) but discounters and M&S score higher for this area (with 27 and 40% respectively). Product quality, which has been criticised by shoppers in the past, continues to dog the retailer. Scores for fresh quality produce are low (22%).
Asda – Scores well across individual factors and across the board for ‘good overall value’ for 35% of shoppers.
Sainsbury’s – Comes out well for fresh, quality produce that lasts, but scores drop to just 9% for low prices.
Morrisons – Drive to deliver real freshness at good prices sees it out-performing Sainsbury’s on all factors, although it is not yet challenging the much stronger ‘freshness’ positions of Waitrose and M&S.
Discounters (Aldi/Lidl/Netto) – Score the highest for ‘helping shoppers for getting the most out of their money’ (38%).
Co-op – With low scores across the board, Co-op has the worst perception of ‘value’ of all retailers examined. It’s clear that there’s plenty of room for improvement here.
Marks & Spencer – Scoring the highest figures across several individual factors, the premium offer from M&S is clearly defined around freshness. It has also benefitted from its consistent programme of solutions-based promotions, such as ‘Dine in for £10’
Waitrose – Similar to M&S, Waitrose does well for its fresh, long-lasting produce, however there’s scope for developing its value position to ensure that it has products and prices to suit everyone no matter their budget.
Shoppercentric managing director Danielle Pinnington said: “We think there is a wake-up call here for Sainsbury’s. The current ‘brand match’ campaign does not appear to have translated into strong value for money perceptions among shoppers. This could be down to the fact that there are times when brandmatch tells you your basket has cost several pounds more than a competitive shop, in which case the fact that Sainsbury’s will give you your money back on your next purchase feels like a backhanded compliment.”
She added: “When shoppers are feeling the pinch, it is important that retailers really understand their needs and align their offers to the new shopper requirements. This research should be a much needed reminder to the retail industry, and brand manufacturers, that promotions aren’t the answer to the economic downturn. A sales spike is not a real change in behaviour. And a BOGOF is not always value for money.
“Shoppers have grown cynical about promotions, with many believing that price cuts are achieved by hiking prices first, or by reducing pack size. Of course, this doesn’t mean shoppers aren’t buying on promotion. An offer on the right product, at the right time will increase sales, but current promotion-deluge approach is not a long term strategy that can be sustained.”
