Coca-Cola has admitted it was caught on the hop by its rivals’ strong Olympic year promotional activity in 2012, which contributed to a slump in sales. And it clearly doesn’t want it to happen again.
Coke upped promotional activity at the start of 2013, and it continued last month as the brand ran 208 deals - up almost 200% on the 73 it ran this time last year.
The company claims the activity has already helped it grow market share this year.
Coke was not the only brand going up a gear, with Premier Foods doubling its offers on Mr Kipling year-on-year, a feat almost matched by Fox’s.
Half the packaging materials in our tracker remain cheaper than they were a year ago, but even those that are still down on a year-on-year basis have increased in the past four weeks. Weak market demand led the UK price of carton board to fall in 2012 - and, at £1,193.7/tonne, it remains 10.9% cheaper than this time last year - but demand picked up in February, increasing prices by 5.5% month-on-month.
It’s a similar story for polypropylene, LDPE and HDPE, which are cheaper year-on-year but have risen by 1%-5% month-on-month.
Meanwhile, Kraftliner prices have risen by 11% over the past year due to firm demand and tighter supplies following the closure of a large producer in Sweden in 2012. Prices are also up month-on-month, albeit by a more modest 1.5%.
Also up significantly is polystyrene, driven by a rise in the cost of benzene, with prices rising by 10.7% year-on-year and 1.8% month-on-month.
This activity has contributed to a 26.7% year-on-year hike in overall featured space promotions. Data from Assosia for the four weeks ending 3 March shows that seven of the top 10 most-promoted brands are running a greater number of offers than a year ago.
At a category level, the biggest rise in year-on-year activity have been in fresh food - partly a result of retailers expanding fruit & veg into featured space areas at the front of store. This has contributed to the number of produce deals rising 93% year-on-year, from 311 to 601.
The number of meat, fish & poultry deals has risen 62% to 568, while offers on chilled food have risen by a similar amount to 533. The other big rise was in petcare, up from 85 to 140, with most other categories showing relatively modest rises. The one category-level decline recorded by Assosia was in ambient grocery, which slipped fractionally from 1,128 to 1,120 offers.
Across the market, x-for-y deals are up in the past year - from a 26.9% share of all promos in 2012 to 35% this year, while the proportion of half-price and straight ‘save’ offers has dipped by around four percentage points each.
The data also suggests a shift in retailers’ promotional strategy towards own-label products as reported last month [The Grocer, 9 February 2013], with the total number of own-label offers up from 1,199 a year ago to 1,891. Month-on-month, own-label offers have declined in line with much of the market.
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