Are Supermarket Savings Schemes Changing Shopper’s Price Perceptions?

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Are Supermarket Savings Schemes Changing Shopper’s Price Perceptions?

We’ve seen that shoppers are noticing supermarket’s efforts to slash prices…but the picture isn’t quite that clear….

Way back in 2014, we carried out some research into how well shoppers thought supermarkets were delivering on their price promises, and since then, we’ve monitored how these perceptions have changed.

 

SBXL-shopper-graph-1

Sample size: 1,000 shoppers per year (nationally representative)

 

And the results?

So good news all round? This certainly suggests that shopper’s perceptions have changed in response to the supermarket’s efforts in the past couple of years to drive down their prices.

But is this picture a universal one in the supermarket landscape?

ASDA were the first to introduce their ‘Price Guarantee’ in 20101, closely followed by Sainsbury’s in 2011 with their very own ‘brand match guarantee’, which matched the costs of its branded products with ASDA and Tesco.2 Not wanting to be out-done, Tesco then launched its ‘price promise’ in 2013, which offered its customers a comparable shop not only on branded goods, but on own label and fresh products too.3 Unable to resist any longer, Morrisons finally jumped on the bandwagon in 2014, but went one better with their ‘Match and More’ scheme and became the only supermarket to provide a branded price match with ALDI and Lidl alongside the usual three big named supermarkets.4

Tesco have been tackling perceptions since the beginning of 2015, when they announced that they would be cutting the prices of over 350 branded products by 25%.7 In February of this year, they also announced that in order to mirror the successes of ALDI, they have ditched the multibuy promotions in favour of price reductions on single items.8

More recently, in February of this year, Morrisons introduced its ‘price crunch’ scheme, which saw them reduce the price of over 1000 lines including both own-label and branded goods.6 A few months on and they have announced efforts to reduce the price of 847 items labelled ‘family items’, such as nappies, bread and milk.5

Then, in April this year, Sainsbury’s caused controversy when they decided to change tack and start focusing on reducing the regular prices on existing goods.5 Meanwhile, the other major competitors have decidedly stuck with their ‘matching schemes’, but have shadowed Sainsbury’s by exaggerating their investment in driving down prices.

SBXL-shopper-graph-2

Sample size: 1,000 shoppers per year (nationally representative)

 

But does all of this have any impact on perceptions at store level?

Despite Morrisons being top for price perception in 2014 (and arguably doing the most to change their prices in the meantime) their perceptions have changed very little despite their efforts, where they now sit behind Sainsbury’s, Asda, and Tesco.

Sainsbury’s have seen the biggest shift in their perceptions, indicating their drive to change has been noticed by their shoppers. They’re now the supermarket doing the most to offer the best prices in shopper’s eyes.

With many supermarkets now favouring Sainsbury’s drive on reducing the regular prices of existing goods, it will be interesting to see how these price promises change perceptions long-term, and whether Sainsbury’s can maintain their crown in another 2 years.

 

References

  1. http://www.campaignlive.co.uk/article/999644/asda-launches-price-guarantee
  2. http://www.retail-week.com/sectors/grocery/sainsburys-to-launch-brand-match-nationwide-on-wednesday/5029989.fullarticle
  3. http://www.moneysavingexpert.com/news/shopping/2013/03/tescos-new-price-promise-can-it-beat-rivals-price-guarantees
  4. https://www.theguardian.com/business/2014/oct/02/morrisons-promises-match-aldi-lidl-prices
  5. http://www.mirror.co.uk/money/sainsburys-morrisons-launch-supermarket-price-7868517
  6. http://www.campaignlive.co.uk/article/1381633/morrisons-launches-price-crunch-1000-brand-own-brand-products#
  7. https://www.theguardian.com/business/2015/jan/08/tesco-further-price-cuts-supermarket-wars-dave-lewis
  8. http://www.dailymail.co.uk/news/article-3426775/Tesco-end-BOGOF-deals-favour-price-cut-Valentine-s-meal-promotions-steal-ideas-successful-rivals.html

 

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