Multiples up promotions in preparation for festive fight

The final Halloween deals and the start of the long, drawn-out Christmas trading season resulted in a sharp rise in supermarket promotions last month.

Over the four weeks to 24 November, all of the big five retailers increased the number of deals compared with the previous four weeks. Waitrose was the only exception: the number of deals was up just 0.17%, while it was also the only major supermarket to reduce the number of offers compared with the same period a year ago, according to the latest figures compiled for The Grocer by Assosia.

See the full table here.

The good news for consumers is that as well as more deals, retailers are being more generous in terms of savings versus last year – a sure sign that in a shrinking grocery market the major supermarkets will be fighting harder than ever for shoppers’ festive spend.

Much has been made this week about what Tesco needs to do to remedy its problem of falling sales. Some analysts have argued that the retailer should launch a major price war at the expense of its current profit margin, but which would have an even more devastating impact on its smaller rivals.

While there is certainly no evidence that Tesco is about to “go nuclear”, the UK’s biggest supermarket offered 2,634 featured space promotions – more than any of its big four rivals – over the period, up 13.8% on 2012. Its average saving of £1.82 was also 1.63% more than it was giving away a year ago, though its average start price was higher than any other retailer bar Waitrose.

Meanwhile Asda, which last month revealed plans to invest £1bn cutting prices over the next five years in order to grow the gap over its big four rivals and close it on the discounters, has also caught the promotional bug. For the four weeks to 24 November it had 2,338 deals, up 4.61% month on month and a massive 23.12% on the same period last year. Its average savings was also 6.55% higher than in 2012 – the biggest increase of any of the leading retailers.

Sainsbury’s 2,612 deals represented an increase of 4.35% on last month and 2.59% on last year. Its average saving was 4.75% higher than a year ago while Morrisons was only up 0.76% on last year. However, at 36.48%, Morrisons still offered the highest average saving.

Potatoes cheaper and better quality

Although potatoes have risen in price over the past month because the weather delayed this year’s harvest, they are significantly cheaper than they were a year ago. Quality and yields are markedly better than in 2012, when poor weather led EU potato production to fall by 12% to 54.7 million tonnes - its lowest level since 2006.

UK carrot prices are also down year on year thanks to a good harvest. However, UK onion prices are up 62.5% year on year because the UK harvest was slightly delayed by bad weather.

Meanwhile, prices for key salad lines such as iceberg lettuce and peppers are down seasonally because supply into the UK has switched to Spain and availability is strong. Iceberg is down 51.4% year on year, with pepper prices down 12.2%.

Following some delays to the season, UK apple prices have now also started to fall as harvesting in most European countries is now under way.