IGD convention 2014

Boost declining sales with lower prices, retailers told

By Nicholas Robinson contact

- Last updated on GMT

Consumers want lower prices not special offers, according to IGD research
Consumers want lower prices not special offers, according to IGD research

Related tags: Price, Retailing, Want

Supermarkets must work on lowering prices instead of relying on promotions, if they are to boost their declining sales, delegates at IGD’s annual Convention were told yesterday (October 7).

Food sales fell this July, despite remarkable growth in the UK’s economy, Joanne Denney-Finch, chief executive of the food and consumer goods research organisation IGD said in a speech.

“I’ve never seen so much turmoil before during my lifelong career and to understand why, we’ve examined how shopping behaviour has fundamentally changed in recent times.”

Shopper backlash

There was a shopper backlash that emphasised the need for food businesses to boost their shoppers’ satisfaction, new IGD research had shown.

“People tell us they are faced with a promotional blizzard when buying groceries, so clearing the fog over pricing is a priority,” ​said Denney-Finch.

Promotions, although they had their place in retail, should be used decisively and be guided by shoppers, she added.

More than half (55%) of shoppers asked by IGD said they wanted price cuts more than multi-buys.

“This is one reason why discounters have grown in popularity from a low base,” ​said Denney-Finch.

“Shoppers have told us the discounters have listened and responded to them.”

More than half (54%) of those asked had used a discounter in the past month, which was the highest level for four years, according to the survey.

The food industry was the UK’s most important sector – worth more than the car and aerospace sectors combined – added Denney-Finch.

‘More than 26M’

“It feeds more than 26M households every day, we need to be even more customer-focused, fast-moving and inventive,” ​she added.

“And while more disruption lies ahead, it’s nothing that food and grocery companies can’t turn into their advantage by listening harder to shoppers and acting decisively on what they say.”

Major food business bosses had to push shopper satisfaction deeper into the heart of their boardrooms, which meant giving consumers what they wanted, she added.

People were shopping around more and investing more time to get the best quality and ethical standards to match their budgets.

“On average, we make 24 shopping trips per month and use four different types of retail formats when buying our food and groceries. And yet people still don’t want to spend any more time and effort than they need to,” ​said Denney-Finch.

Companies should be aware of five specific areas to ensure they are boosting their shoppers’ satisfaction, she said.

The five areas:

  • It’s not just about price; it’s also about value for money – which differs from person to person
  • Greater personalisation of the shopping experience
  • Utilising technology to allow us to shop smarter
  • Small companies are increasing in importance
  • Rising importance of trust as loyalty becomes more important

Related topics: Ambient foods, Chilled foods, Drinks

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