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With consumers looking to stretch their money as far as possible, it’s no surprise that they might be attracted by promotions and sales at their local grocery store. But according to a new study from The Nielsen Company, 42.8 percent of grocery purchases are sold on promotion, up from 40.8 percent a year ago. Drug stores, too, sell a significant portion of products on promotion, with 40.4 percent of sales linked to displays and/or features.
Trade promotions include products featured in ads and in-store circulars, products displayed on the end of aisle caps or away from their normal locations, and products with temporary price reductions.
“Although we shouldn’t be surprised by an increase in promoted sales during a recession, it’s stunning to see an additional 1.3 billion purchase decisions being influence by in-store promotions,” said Tom Pirovano, director, industry insights at Schaumburg, Ill.-based Nielsen.
Other key findings from Nielsen’s study:
--Chicagoans buy the most on promotion, with 55.9 percent of products sold on promotion, followed by Phoenix, the island of Oahu and Indianapolis
--San Antonio, Oklahoma City/Tulsa and Birmingham have the lowest promotion sales
--Impulse purchases such as ice cream, crackers and carbonated beverages sell the most on promotion
--Conversely, magazines, ice and tobacco sell the least on promotion
In other promotional activity, Nielsen found that coupon activity -- which has seen a strong resurgence among American consumers over the last year -- was highest in disposable diapers (21 percent of which were sold with a coupon), dough products (14 percent) and sanitary protection (12 percent). By measuring the average number of units purchased per trip, Nielsen identified canned cat food, baby food and canned dog food as the best candidates for buy-one-get-one (BOGO) promotions. This same measure found that coffee makers, baking powder and dishwasher rinse aids are the weakest categories for BOGO promotions.
“The key for consumer product manufacturers is to set goals for each trade promotion, and then measure the results to determine which promo events are the most efficient and effective,” said Pirovano. “Retailers who can drive their feature ads with the right mix of products, price points and display support will have success with both their vendors and shoppers.”