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Morrisons’ June 2015 price cuts: Are they deeper than the February 2015 cuts?

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On 8 June Morrisons announced price cuts on 200 everyday items, almost four months since it’s last round of price cuts on 17 February.

This announcement follows positive news for Morrisons as Kantar Worldpanel reported that the retailer increased its quarterly sales for the first time since December 2013. Morrisons’ sales increased by 0.1 percent in the 12 weeks to 28 May 2015 and it was the only one of the big four supermarkets to see sales growth.

The reported growth will be welcome news after a challenging year; David Potts was hired to replace Dalton Philips as Chief Executive and profits have fallen by 52 percent, the worst result for eight years.

Following the report of its profits fall, Morrisons pledged it would spend £1 billion lowering prices over the next three years.

Change to average base price

In the online press release, Morrisons highlighted reductions on products in ten categories: Butter and Spreads, Eggs, Feminine Hygiene, Juice and Smoothies, Milk, Ready to Eat Cereal, Sugar and Sweeteners, Tinned Fish, Wrapped Bakery and Wet Baby Food.

Brand View has reviewed the base price of these categories since 1 February 2015 and can conclude that the latest price cuts have not reduced the base price as much as those of 17 February.

The latest price cuts reduced the average base price by 0.5 percent, leading to an overall drop in base price of 1.9 percent since 1 February.

The price cuts on 17 February cut the base price by 1.1 percent before it rose by 0.4 percent two weeks later. The increase was due to nine Kellogg’s products and one Pasquier SKU increasing in price – these products were not part of the price cuts on 17 February.

morrisons average base price

Category base price reductions

Brand View has identified 222 base price reductions on 8 and 9 June; 22 more than Morrisons indicated in its press statement.

Morrisons introduced reductions across more categories in June than February; almost one third of reductions were in the Juice and Smoothies category in February. In June, the retailer reduced prices across 78 Brand View categories, up from 21 categories on 17 February.

In June, Morrisons made the most reductions in the Yogurt category. Some 12 products were reduced in price, followed closely by the Juice and Smoothies and Wet Baby Food categories where ten products were reduced in each category.

In February, it lowered prices on 46 items across the Coffee, Dry Pasta and Hot Cereal categories. Morrisons avoided further reductions in these categories in June, other than the 150g Nestle Gold Blend refill pack which was cut by 16.3 percent.

category reductions

Deepest price reductions

Morrisons focused its deepest reductions on non-food categories such as Deodorant, Cleaning and Men’s Razors and Blades. The deepest price reduction was on Wet Baby Food where it reduced the majority of the Heinz Mum’s Own range by 30.4 percent.

In February the retailer reduced prices for Eggs, Milk, Juices and Smoothies, and Wrapped Bakery products by an average of 23.4 percent. In June, it continued to reduce prices in these categories, however the average level of reduction was 9.4 percent.

percentage base price reduction

In its press statement Morrisons said it would cut price “by up to a third.” However, Brand View has identified six products that have been reduced by more than that; the greatest reductions were made to two Golden Wonder Oh So Tasty rice products which fell from 65p to 30p.

golden wonder rice
Morrisons website 10 June 2015

Morrisons also highlighted a 25 percent reduction on Tate & Lyle Fairtrade Granulated Sugar in its press statement, however, this is a mistake as they only stock Tate & Lyle Icing Sugar. The reduction is actually to 1kg of Silver Spoon Granulated Sugar and was listed correctly on the website.

morrisons press statement
Morrisons press statement 10 June 2015
silverspoon sugar
Morrisons website 10 June 2015

Retailer price comparison for sugar and sweetener category

Brand View has reviewed the Sugar and Sweetener category, focusing on the price of a 1kg pack of white granulated sugar in Aldi, Asda, Lidl, Morrisons, Ocado, Sainsbury’s, Tesco and Waitrose.

The recent reductions now makes Morrisons the second cheapest retailer with the price of 52p, following a period of being the second most expensive for the previous 68 days. Lidl are the cheapest retailer selling own label granulated sugar for 49p. Ocado were the most expensive retailer for almost the entire analysis period with a price of 79p.

1kg sugar

Morrisons price increases

Although Morrisons is focusing on reducing the price of over 200 products, it also increased the price of 36 items on 8 and 9 June. This was most noticeable in the Carbonates category where it increased the price of 15 Coca-Cola and Pepsi products.

It has increased the base price of all the 8 x 330ml variations of Coca-Cola, Cola-Cola Zero and Diet Coke by 16.7 percent and the 8 x 330ml packs of Diet Pepsi, Pepsi and Pepsi Max by 25.4 percent.

The 8 x 330ml Coca-Cola products continue to be on promotion at 2 for £5 so the base price rise has yet to affect the shopper.

The Pepsi products were on a 2 for £4 promotion, however this ended two days prior to this base price increase so the shopper has actually seen the price more than double. This now means that the shopper can purchase four more cans for £1.39 less because of a promotion on the 12 x 330ml products.

pepsi promotions
Morrisons website 10 June 2015

 

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