Supermarkets are embarking on record levels of promotions as they battle to persuade tiffany jewelry cash-strapped shoppers to part with their money in the crucial run-up to Christmas.
At the checkouts of the big supermarkets, 35 per cent of all sales by value are on promotion, compared with 26 per cent a year ago, according to Nielsen, the market research group.
Mike Watkins, a senior manager at Nielsen, said this was a record high for promotions. “Typically promotions peak around the end of November every year. They peaked a long time ago and are remaining high,” he added.
Supermarkets are ramping up offers, often part-funded by their suppliers, as they fight the effects of falling food price inflation, which means they must work harder to drive sales. They are also expanding rapidly into areas such as clothing, entertainment and electronics in an effort to capture a bigger slice of these markets.
Judith McKenna, finance director of Asda, has predicted this year will be the “most competitive banglesChristmas for a decade”.
Asda is expanding its promotional offerings this year, with deals on toys and electronics as well as on food.
Tesco said it was concentrating on delivering products for clear low prices such as 1, 2 or 3. But this week alone it was running 3,200 promotions in its stores and more than 250 half-price offers.
“Whether you call it a promotion or a price cut, it is going to be a bumper Christmas for consumers being able to buy food more affordably,” said one person familiar with the retailer.
Wm Morrison has in recent weeks been offering half-price deals on meat and fish among its promotions. From Monday it will begin a “price crunch week”, with further Christmas offers.
J Sainsbury, which has also been running a series of offers, said its level of promotions was rings about the same as last year, at 30-33 per cent, just below the industry average, but higher than two years ago, when the proportion of sales on promotion was about 20 per cent.
Tesco, Sainsbury and Morrison are slugging it out with loyalty or voucher schemes.
Angus Maciver, Morrison’s group marketing director, said: “This year we have seen more investment in promotions but at the same time big investment in loyalty. Both have gone up.”
Even Marks and Spencer is promoting its party food and champagne, while Waitrose, its upmarket rival, will run 40 per cent more offers this December than last.
“The food market has become far more promotional than it has been for many years, and I don’t see that braceletsChristmas could possibly be any less so,” said Richard Hyman, strategic retail adviser to Deloitte.
Some retail watchers are sceptical at the overall value of the promotional bonanza to consumers, amid concerns supermarkets may be putting up prices of other goods to compensate.
It has also raised fears among analysts and investors that the promotional war will infect other parts of the high street.
According to a survey of 100 retailers by PwC, the professional services firm, about half of high street shops were offering discounts or promotions, such as three products for the price of two. This is a similar level to last year, when the economy was lurching downwards.
However, executives and analysts hope the heavy discounting and one-off sales days seen last year will cufflinks be avoided. “Against last year when there was a bloodbath, you would expect less discounting and clearance,” said Tony Shiret, analyst at Credit Suisse.
Retailers are considering whether to pass on the higher rate of value added tax on January 1, when it returns to 17.5 per cent from 15 per cent, or absorb this cost themselves.
Supermarkets battle for Christmas shoppers
Supermarkets are embarking on record levels of promotions as they battle to persuade tiffany jewelry cash-strapped shoppers to part with their money in the crucial run-up to Christmas.
At the checkouts of the big supermarkets, 35 per cent of all sales by value are on promotion, compared with 26 per cent a year ago, according to Nielsen, the market research group.
Mike Watkins, a senior manager at Nielsen, said this was a record high for promotions. “Typically promotions peak around the end of November every year. They peaked a long time ago and are remaining high,” he added.
Supermarkets are ramping up offers, often part-funded by their suppliers, as they fight the effects of falling food price inflation, which means they must work harder to drive sales. They are also expanding rapidly into areas such as clothing, entertainment and electronics in an effort to capture a bigger slice of these markets.
Judith McKenna, finance director of Asda, has predicted this year will be the “most competitive bangles Christmas for a decade”.
Asda is expanding its promotional offerings this year, with deals on toys and electronics as well as on food.
Tesco said it was concentrating on delivering products for clear low prices such as 1, 2 or 3. But this week alone it was running 3,200 promotions in its stores and more than 250 half-price offers.
“Whether you call it a promotion or a price cut, it is going to be a bumper Christmas for consumers being able to buy food more affordably,” said one person familiar with the retailer.
Wm Morrison has in recent weeks been offering half-price deals on meat and fish among its promotions. From Monday it will begin a “price crunch week”, with further Christmas offers.
J Sainsbury, which has also been running a series of offers, said its level of promotions was rings about the same as last year, at 30-33 per cent, just below the industry average, but higher than two years ago, when the proportion of sales on promotion was about 20 per cent.
Tesco, Sainsbury and Morrison are slugging it out with loyalty or voucher schemes.
Angus Maciver, Morrison’s group marketing director, said: “This year we have seen more investment in promotions but at the same time big investment in loyalty. Both have gone up.”
Even Marks and Spencer is promoting its party food and champagne, while Waitrose, its upmarket rival, will run 40 per cent more offers this December than last.
“The food market has become far more promotional than it has been for many years, and I don’t see that bracelets Christmas could possibly be any less so,” said Richard Hyman, strategic retail adviser to Deloitte.
Some retail watchers are sceptical at the overall value of the promotional bonanza to consumers, amid concerns supermarkets may be putting up prices of other goods to compensate.
It has also raised fears among analysts and investors that the promotional war will infect other parts of the high street.
According to a survey of 100 retailers by PwC, the professional services firm, about half of high street shops were offering discounts or promotions, such as three products for the price of two. This is a similar level to last year, when the economy was lurching downwards.
However, executives and analysts hope the heavy discounting and one-off sales days seen last year will cufflinks be avoided. “Against last year when there was a bloodbath, you would expect less discounting and clearance,” said Tony Shiret, analyst at Credit Suisse.
Retailers are considering whether to pass on the higher rate of value added tax on January 1, when it returns to 17.5 per cent from 15 per cent, or absorb this cost themselves.