Shoppers focus on price discounts

The level of promotions in the UK grocery sector has tripled in the last month and moved decisively towards straight price discounts, underlining the huge pressure on household budgets.

Research by the accountancy firm PwC found on average nine of its 20 Christmas items – equal to 45 per cent –were on promotion between 5 and 6 November. This compares with eight the previous weekend and just three at the beginning of October.

The biggest shift was towards price discounts, which accounted for six – or two thirds – of the promotions on products last week including frozen turkeys, Christmas puddings and bottles of Baileys.

In contrast, the number of multi-buys fell from three to two of the 20 products, while Bogofs (buy one get one free) remained static at one.

Christine Cross, the chief retail adviser to PwC, said: "Consumers have 'fallen out of love' with multi-buys and want straight discounts ... not surprising. In tough times, retailers try to reduce their stockholding and increase their rotation of stock. Why should consumers behave any differently?"

The survey chimes with the comments by Morrisons and Sainsbury's on price promotions this week. On Thursday, Dalton Philips, the chief executive of Morrisons, forecast a "very tough Christmas" for the sector, adding that a third of its customers have "nothing left" at the end of the month. This means the grocer is tailoring its promotions to cutting prices on single items around this time.

Ms Cross said consumers were cutting back on discretionary items, such as chocolate, beers, wines and spirits. She said: "In grocery, it [discounting] has started earlier than we had expected. But the price theme will continue through to January."

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