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Do retailers’ product pricing increase in the run up to Christmas

By Chris Elliott

IRI Strategic Insight Director, Tim Eales, recently commented that ‘[Supermarket] prices usually start to rise just before Christmas as the deep promotions that retailers use throughout the year ease off a little, so that they can maximise the boost that Christmas usually brings’.

Brand View has reviewed the average price of the UK’s major supermarkets across a selection of categories including Beers, Spirits, Cold Drinks, Tins and Jars, Confectionery, Table Sauces and Snacking.

This analysis shows that all of the supermarkets have a lower average price now than they did at the start of June. Asda have the greatest reduction in average shelf price at 3.9 percent with Tesco next at 3.5 percent. Asda had a large drop in average price the week starting 27 October 2014, this is due to it dropping the prices across a range of categories but particularly spirits. Going into December we can see that Morrisons and Sainsbury’s are maintaining their prices whereas Asda, Tesco and Waitrose are dropping theirs.

Average shelf price index across the grocery category

All five retailers are offering more promotions now than they were at the start of June. Morrisons have had the greatest increase in the number of promotions with an increase of 30.9 percent. Waitrose have had the second biggest with 26.1 percent – it dramatically increased the number of products on promotion the week commencing 10 November 2014, these new promotions were across all categories. Tesco offered the smallest increase in number of promotions with 4 percent.

Percentage change in the number of promotions across the grocery category

Looking at last year’s average shelf price across the same categories for the same time period, we see a similar trend to 2014 where all retailers have a lower average shelf price in December than they did in June. Asda, Morrisons, Sainsbury’s and Tesco have all reduced their prices this year by more than they did for the same period in 2013.

Waitrose are the only retailer who have reduced its average shelf price in 2014 less than it did in 2013. From 2 June 2013 to 8 December 2013, Waitrose dropped its average shelf price by 1.6 percent, for the same period 2014 they reduced its average shelf price by 1.3 percent.

Looking past 8 December 2013 we see that Asda, Sainsbury’s and Waitrose all dropped their average shelf price in the run up to Christmas. Morrisons and Tesco both increased their average shelf price with Tesco having the greatest increase of 1.2 percent between 8 December 2013 and 29 December 2013.

Average shelf price index across the grocery category

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