Supermarkets have responded to the credit crunch by increasing the amount of promotions on offer, but how are shoppers reacting to their changing tactics?

Our latest consumer research finds out what shoppers like, dislike and want more of when it comes to food and grocery promotions.
 

Increasing industry focus on promotions

Examples of retailers' promotional activity

Industry has increased spend on promotions in recent years. The proportion of store turnover dedicated to promotions for the top five retailers has grown from 28% in 2007 to 32% in 2009 (Source: TNS).

Our recent research conducted among manufacturers found that the downturn is leading to changes in promotional strategies:

• 37% are employing more innovative promotional tactics
• 35% using deeper promotions
• 33% are running a greater number of promotions

The type and nature of promotions have also gradually changed, with stronger emphasis on single product discounts rather than on some ‘multi-buys’ (such as ‘buy one, get one free’).

So what do shoppers make of these changes and are they adapting their shopping behaviour as a result?
 

Promotions and the recession

Shopper behaviour has been changing during the economic downturn. Our research in the summer revealed that over a quarter (28%) of shoppers have been making changes to their food and grocery shopping specifically in response to the recession.

In our latest research, Promotions and Customer Loyalty, many shoppers were trading time back for cash by eating more at home and cooking from scratch. A greater number are looking out for promotions and scrutinising the offers carefully.
 

Promotions under the magnifying glass

Shoppers are employing a number of tactics to make the most of the wide range of promotions on offer. Examples include:

• Comparing different promotions and offers on the same fixture
• Comparing promotions in different stores
• Changing their shopping routine by buying more non-perishable products in bulk

Overall, shoppers are mainly enjoying hunting around for bargains and obtaining savings.

I quite like shopping now for less using promotions. It’s a challenge and I feel quite chuffed having saved some money.     Bushey, female, with children aged 6-12, BC1

Industry is doing some things well

Shoppers appear to be increasingly satisfied with industry on a number of areas associated with promotions.

The meal deal offer, such as the Dine in for Two for £10 from M&S, has proved to be a compelling proposition for shoppers concerned about their budget but wanting to indulge themselves and it appears that industry is meeting shopper requirements in this area. Fewer now require more of these deals and only 5% want to see more linked promotions compared to 10% in 2007.

Fewer shoppers appear to be concerned about wanting to see shelf life improved for food and grocery products on promotion (9% compared to 15% in 2009) and a smaller number are concerned about the quality of products on offer.
 

Room for improvement

Ensuring products on promotion are always available is the most important issue that shoppers would like to see improved with three in ten (31%) mentioning this overall.

Around one in five (21%) shoppers would like to see all promotions providing significant savings e.g. at least 25%.

That cereal is £1.64 compared to £1.76 previously. It’s not that good a deal.     Sheffield, female, with children aged under 6, BC1

The same proportion (21%) would like to see price reductions rather than ‘multi-buys’ that encourage them to buy more than they need. This has risen from 17% in 2007.

There is growing confusion among some shoppers concerning the details of some promotions. More shoppers would like the labels to always let them know when the promotional offer ends (18% compared to 14% in 2007). A similar proportion wanted to see both the original and new price displayed for products on promotion (17%), and 15% wanted products that qualify for promotion to be more clearly identified.
 

Taking action

With shoppers increasingly scrutinising prices and promotions, industry needs to keep pace with changing shopper behaviour and tactics. Focusing on improving availability of promoted products and providing greater transparency in signage and merchandising will be key to meeting shopper requirements.
 

More information:

	Promotions and Customer Loyalty
	What do shoppers like and dislike about promotions? Do promotions win and build new and loyal customers? And what promotional tactics work? Find out in this new report, which tracks shopper attitudes and behaviours towards promotions and assesses the impact on loyalty.

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Michael Freedman has over 18 years agency and clientside experience in managing and conducting qualitative and quantitative research projects covering emerging trends affecting the food and grocery industry. Michael has recently been involved in research exploring food-to-go, understanding attitudes to place of origin, local food and food miles, and exploring how these issues are affecting shopping purchase decisions.

Michael is an experienced presenter who regularly delivers bespoke briefings and training courses on shopper behaviour. Michael is the author of IGD's Promotions and Customer Loyalty report.