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Two key themes played out in the ad promotion space this Thanksgiving among food retailers, which either promoted their one-stop-shopability for Thanksgiving needs, or their low-price-leader status on select key holiday table fare, according to a recent study by ECRM Data.
“Thanksgiving prep generates some of the largest basket sizes of the year,” said Scott Whalley, SVP of analytics and software sales, ECRM Data. “Retailers are doing whatever they can do to drive traffic into their stores, including aggressive pricing on key Thanksgiving items.”
The study was based on an analysis of circular ad promotions of items in ECRM’s Thanksgiving Basket, which consists of the 10 heaviest-promoted products for the Thanksgiving table, including two proteins (turkey and ham); sides (dry boxed potatoes, stuffing mix, sweet potatoes, cranberry sauce and green beans); dessert (pumpkin mix); and condiments (butter and gravy). ECRM examined which retailers promoted these Thanksgiving Basket items, how many of these items each retailer promoted, and the pricing of these items in the ads.
The study further covered ad promotions for the week of Nov. 16-24, 2014, and compared these promotions to those from the same time period the previous year, Nov. 17-25, 2013.
Not surprisingly, all of those retailers that promoted themselves as a one-stop shop for all things Thanksgiving (listing at least nine of the 10 Thanksgiving basket items on their circular) were from the grocery channel, nine of which also made the list last year. For these retailers, availability of Thanksgiving basket products trumped price, as on average they indexed higher for price for 2014 compared to 2013.
Advertised prices of Thanksgiving items indexed higher this year for 11 of the 16 retailers that promoted at least nine Thanksgiving basket items, with three indexing the same as 2013 and only three indexing lower. Among those retailers with a higher price index were SunMart Foods, which indexed 23 points higher than in 2013; Price Cutter, at 19 points higher; and Albertsons South Division, at 17 points higher than last year.
“During the holidays, consumers are more likely to condense their trips to avoid waiting on long lines at several stores,” said Whalley. “So consumers would be more willing to pay slightly higher prices for the convenience of finding everything in one place.”
Low-Price Basket Leaders
Among those retailers that leveraged price on several key Thanksgiving basket items to drive traffic, their pricing was even more aggressive this year over 2013, according to the study. Of the 16 retailers that offered the lowest prices on at least six of the Thanksgiving basket items, half indexed lower compared to last year. Walmart, Acme and Great Value indexed significantly lower than last year with regards to pricing. Stater Bros., which had the lowest advertised prices of the group, indexed 15 points lower than last year.
Thanksgiving Basket offer types by category remained virtually the same year over year, with price point promotions accounting for nearly all of the ads for turkey, ham, green beans and sweet potatoes, while x/For offers were more common for boxed foods. Stuffing mix and dry boxed potatoes saw a slight increase in x/For offers versus price from 2013 to 2014.
For items like cranberry sauce and stuffing that many people don't buy on a regular basis throughout the year, Whalley said: "They really don’t know what the price should be, or if they are actually saving money because there’s nothing to compare it against. Because of this, retailers focus on price of x/for offers for most Thanksgiving Basket items. And for the products for which shoppers buy in multiples, such as stuffing mix or potatoes, when they see a 10 for $10 deal on the ad, could very well be the thing that gets them to go into the store.”
Lowest Prices by Category
East Coast retailers were absent from the list of lowest-promoted prices for the Thanksgiving Basket categories, which were found primarily among retailers from the Midwest to the Pacific. Listed below** are the products with lowest promoted prices for each category, along with the retailer and the city in which the circular ran:
- Butter/Margarine: 50 cents per 1-pound box (Food 4 Less, Los Angeles)
- Canned Pumpkin: 75 cents per 15-ounce can (Super Saver, Omaha, Neb.)
- Cranberry Sauce: 48 cents per 14-ounce can (Super 1 Foods, Spokane, Wash.)
- Dry Boxed Potatoes: 69 cents per 4-ounce box (Aldi, Cleveland)
- Gravy: 78 cents per 12-ounce jar (Foodland, Pittsburgh)
- Green Beans: 67 cents per pound (H-E-B, San Antonio)
- Ham: $1.19 per pound (Bashas’ Markets, Phoenix, Ariz.)
- Stuffing Mix: 47 cents per 6-ounce box (Super Saver/NAI, Salt Lake City)
- Sweet Potatoes: 19 cents per pound (Berkol’s Super Foods, Chicago)
- Turkey: 35 cents per pound (Fiesta Mart, Houston, Texas)
**The 10 lowest prices excludes “free” items and items requiring total purchases of more than $25.
Additional details of ECRM's Thanksgiving basket study can be found here.