As the cost of living bites, supermarkets are upping the ante, with a blizzard of new promotions in the run-up to Christmas. And it’s Sainsbury’s that’s leading the charge.
New research from The Grocer using Assosia data shows the Holborn retailer has stepped up the pace in the crucial golden quarter, with the number of deals as much as 37.8% higher than last year. As a result, from having the lowest number of promotions among the traditional big four this time a year ago, it now has the highest.
Sainsbury’s promotions push reached a peak on Monday 5 December this year, with 7,223 vs 5,457 on 6 December 2021, an increase of 1,766 (32.4%) including 1,052 more health & beauty items (up 64.1%), 195 more fresh food deals (22.7%), 239 additional food cupboard offers (26.2%) and 144 further BWS promos (19.8%). This week the differential was even higher at 2,040, though the total number of promos dipped to 6,865. The push has been accompanied by an increase in multibuy promotions as high as 430%, which has mostly been applied to Sainsbury’s (recently pruned) health & beauty range, and alcoholic drinks.
According to Assosia director Kay Staniland, only 39% of Sainsbury’s’ wine range was on offer this time last year, and multibuys accounted for just 12% of those promotions. This year, however, 80% of the retailer’s total wine range is on offer, 50% of which is on a multibuy promotion of ‘buy six, save 25%’ [Assosia, 13 December 2021 vs 12 December 2022].
But with the cost of living crisis intensifying and food price inflation running at 16.4% according to the latest ONS figures for November, promotional activity has picked at almost all supermarkets, with 27.5% of all products on promotion on 12 December, after months of relatively limited promotion due to difficulties passing on cost price increases.
Tesco has introduced promotions on an extra 610 lines (9.9%), including 187 more BWS lines. Asda has put an extra 318 (5.3%) products on deal, with Waitrose (1.1%) also adding more promotions. Of the leading supermarkets, only Morrisons has cut promotions, with 296 fewer deals (–5.7%).
Bryan Roberts, global insight leader at IGD, put the increase in promotions down to competition with the discounters.
“A lot of the acceleration in promotions appears to be a pre-emptive arms race from the major supermarkets in anticipation of the fact many shoppers might be on the brink of switching across to the discounters,” he said.
Brands are also playing a part in the intensifying promotional landscape, added Roberts. “Shoppers are trading out of brands into private label and tbig brands are ramping up promotional spend to avoid losing out to own label.”
Even those supermarkets who’ve chosen not to substantially increase promotions have altered their mix versus previous years, and alcoholic drinks is the main weapon of choice, with booze promos up as much as 18.3% year on year on 21 November.
Alcohol promotions are a key feature of Christmas strategies for supermarkets, who all routinely off 25% off deals on wine multibuys for several weeks.
“As alcohol is a big part of the Christmas basket and often an additional sale, it will also create switch for shoppers,” said Catherine Shuttleworth, CEO of Savvy. As well as an additional sale, said Catherine Shuttleworth, CEO of Savvy, “it’s a shop window into each retailer’s Christmas range and helps the shopper to start considering where they might place their big Christmas shop.”
Supermarkets always push attractive deals on alcohol in the weeks leading up to Christmas, including 25% off deals on wine, but The Grocer’s research suggests deals have been pushed longer and harder than in previous years.
The number of alcoholic drinks promos reached a peak of 4,381 promotions in early December compared with 4,149 last year.
That means 55.3% of all beers, wines and spirits were on promotion.
And whereas alcoholic drinks promos tailed off in December 2021, supermarkets have kept their foot on the discount pedal this year. As of 12 December BWS promotions remained at 4,247 versus 4,131 last year.
Brands have driven alcohol promotions as a way to make up the shortfall in shoppers cutting back on drinking out during the festive period, suggested Alastair Lockheart, insight director at retail and shopper marketing agency Savvy.
“For alcohol, increased promotional activity will, in part, be because brands need to win big in supermarkets to offset potential losses through pubs and restaurants,” he said.
The push on alcoholic drinks has been led by Sainsbury’s, which increased promotions by 127.8% from 728 to 1658 on 5 December, but Tesco (with a year-on-year increase of 84.4%) have also used more intensive discounting on drinks to drive footfall.
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