The pressure on UK retailers to offer more transparent pricing has led to promotional activity falling to its lowest level in a decade.
New research by market research firm IRI found that there was a 25% reduction in the number of items on offer in stores between November 2012 and April 2017. This year, the average number of grocery lines on promotion has declined by 13%, while volume is down by 6.4 percentage points – the fastest rate since the decline began in 2014 and the lowest rate in 10 years.
The study, compiled by analysing more than 300 product categories across major UK supermarkets, means that shoppers will received £3.7bn less in promotional savings. That means the amount saved by shoppers had they bought at full price is down to 11.1%, from a previous high of 13.9%.
The level of promotions stayed relatively stable until early 2015, but forces have conspired to reduce their use since then. For example, the Office for Fair Trading has released new guidelines on promotions, while the Competition Markets Authority has also launched a crackdown to ensure pricing is transparent.
Plus, the ‘big four’ supermarkets of Tesco, Sainsbury’s, Asda and Morrisons have all been under pressure from the discounters Aldi and Lidl, which have rapidly grown market share through a focus on simplified pricing. That has led to many of the big four refocusing on every day low pricing, rather than trying to attract shoppers with deals and discounts.
On top of that, FMCG brands…