Thursday 29 August 2013

When less is not more: How small packs work out cheaper than bulk-buy deals

 Big pack
 Small pack
 Cathedral City Cheddar
 £6.98 (2x 350g)   
 £2.00 (350g)
 PG Tips tea bags
 £4.68 (160)
 £2.00 (80)
 Nescafe coffee
 £11.50 (500g)
 £5.00 (300g)
 Clover spread
 £3.70 (1kg)
 £1.00 (500g)
 Loyd Grossman Sauce
 £2.79 (660g)
 £1.00 (350g)
 Napolina Olive Oil
 £6.49 (1 ltr)
 £3.00 (500ml)   
 Mild cheddar
 £3.10 (400g)
 £2.05 (270g)
 Filippo Berio Olive Oil
 £7.59 (1 ltr)
 £5.49 (750ml)
 Absolut vodka
 £19.60 (700ml)
 £9.00 (350ml)
 Scottish Still Water
 79p (750ml)
 45p (500ml)
Source: Daily Mail survey

The mismatch tends to happen when supermarkets cut the price of small packs for a temporary promotion – or to match reductions at a rival. Whilst the mix-ups are understandable, the real issues are the impact on the savvy consumer-shopper and probable distortion of demand.

However, apart from an inevitable spike in small-pack sales for the duration of the price-cut, retailers need to monitor the effect of the resulting suspicion and lack of trust in terms of impact on shopping behaviour for the remainder of the shopping trip.

For suppliers, the issue is more about the extent to which the shopper blames the brand, rather than the store...

…and since you are probably picking up the promotion-tab, perhaps it is time to add multi-size analysis of unit prices to your promotional checklist in assessing the ROI on the initiative…? 

No comments: