What’s behind retailers’ offers
‘Buy-one-get-one-free’ promotions usually hide increases by suppliers and supermarkets
Washing detergents, liquid soap and other products are often old in “buy one, get one free” offers at supermarkets. Consumers choose them instead of the bigger containers, believing they are saving money by buying at a discount, though the actual cost per measure or unit may be higher.
The higher price on the product will appear at some point at their regular supermarket – usually offers per code have a duration of 15 days – so they will need to go from chain to chain to find it at a lower cost. After the 15th day, the product with the high price will remain on the shelf.
The supplier company, for its part, has appeared to be giving “gifts” to consumers by gaining market share, while the supermarket chain – even if it has actually bought at a discount from the supplier – appears to have bought much more expensively – as in the price list 1+1 type discounts are not often captured – so both can actually increase their profits.
Are the above isolated cases? Unfortunately, official figures from market research companies confirm that the offers been made on an increasingly large scale in the last two years, even if they are not misleading, do not lead to a drop in prices; quite the opposite.
Data from market research firm Circana show that those categories with the most promotional sales are the same categories that recorded the largest price increase in the eight months of January-August 2023 compared to the same period last year. Of the 11 basic categories of so-called “fast-moving” goods (that is, the goods that consumers buy most often from the supermarket), the largest price increase, 13.6%, was recorded in the category of household detergents.
That is the category where in the same period 26.5% of sales were made in the context of offers from 22.9% in the corresponding period of 2022.
The data for dairy products are of interest, a category not usually included in the first phase of setting offers. In January-August sales on offer rose to 24.3% from just 17.4% in the first eight months of 2022 and prices over the same period shot up by 11.8%.
