The UK grocery market is offering shoppers more promotions than any other country in Western Europe, yet deals are not working as they should, a new report by global research and insight company IRI claims.
More than half (54.6%) of the volume of product sales in the UK were bought on offer in 2015, compared to 28.6% for Europe overall.
However, the UK’s promotionally-driven strategies are doing little to actually drive up sales which, for the 52 weeks to May 2015, stood at €82.4bn, the report said.
All of the nine key product categories measured had promotional activity rates of 44% or more. At 68.2%, non-alcoholic drinks (including tea and coffee) was the most heavily promoted category studied, followed by personal care and confectionery which saw a significant rise in promotions compared to last year.
However, the impact of these promotions was found to be weakening as UK shoppers, who have been inadvertently trained to look for deals in-store, concentrate their purchasing into promotional periods, the report said.
“This behaviour is having no signs of slowing down. In essence, this means that the impact of promotions is also declining with each new promotion becoming less effective at achieving the desired uplift than the last,” author Tim Eales said.
Sales volumes in almost all of the nine categories measured were found to have fallen, with a 1.5% fall in volume sales overall. The exception was non-alcoholic drinks, which remained static thanks to increased sales of bottled water.
The UK also saw declines in the value of sales in all but two categories. Alcoholic drinks and household goods both increased value sales by 0.4%.
Household goods was the strongest performing category in Europe during 2015 - evidence that customers were moving beyond necessity budgeting and investing more in their homes by buying a wider range of goods than before, the report said.
UK value sales declined by 1.6% overall during the year, with food down 1.9% and non-food 0.4%. The most dramatic fall was in chilled and fresh food, where sales values fell by 3.8%.
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