The UK leads Europe when it comes to promotional reliance, with over half of all goods sold on promotion, claimed the report Price & Promotion in Western Europe: Encouraging Signs of Recovery.
At 68.2%, soft drinks were the most heavily promoted, followed by personal care and then confectionery, which had the biggest percentage point rise in promotional activity, up by 2.3 points on last year. In the specific category of cola – 83% of volume sold was on promotion.
Promotional sales boost
The report also revealed that, in volume terms, 54.6% of all goods were now sold on promotion in the UK, almost double the figure for Europe (28.6%). This is on overall UK sales of 82.4bn for the period (52 weeks ending May 2015).
The most recent IRI UK data trend to October 2015 showed that the grocery industry, particularly through food and drink, is trying to tackle this promotional activity across both brands and own-label products.
Tim Eales, director of strategic insight at IRI, and co-author of the report, said: “Promotions are designed to increase demand and brand loyalty as part of an overall marketing strategy, but as shoppers, we have been almost conditioned to look for deals in-store and to concentrate our purchasing on promotional periods and this behaviour does not seem to show any signs of slowing down.”
Eales also said the reliance on promotions had created a “worrying pattern” of behaviour, which manufacturers and retailers are finding hard to recover from.
The report also revealed there were declines in sales volume in all categories, with a 1.5% fall in volume sales overall, apart from soft drinks, which remained almost static thanks to increased sales of bottled water.
Value sales showed a decline in all categories, with the exception of alcoholic drinks and household goods, with food down by 1.9%.