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Promotions hit an 11 year low

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SPENDING on supermarket promotions has hit its lowest level in 11 years, consumer insight firm Nielsen has revealed, with deals generating 26% of all UK supermarket spending in the four weeks to 25 March.

Discounters Lidl and Aldi continue to soar, with both in double-digit growth.

Nielsen has said spending on products with temporary price cuts or multi-buy offers is at its lowest level since 2006, when promotions also made up 26% of total sales.

Overall supermarket sales were down 2.6% for the four weeks to 25 March when compared to last year’s figures, however Nielsen acknowledged that the timing of Easter this year “negatively affects comparitive sales”.

Mike Watkins, Nielsen’s UK head of retailer and business insight, said the level of promotional spend has “gone back to levels not seen since before the 2008/09 economic crisis”, adding that in recent years “about a third of the typical supermarket shopping bill” has gone to promotional items.

The reduction in promotional products may not fully translate to higher prices, according to Watkins, who said supermarkets have “turned temporary price reductions into permanent cuts”.

On an individual supermarket basis, Nielsen put Iceland on top for the the quarter, with sales up 5.2% over the 12 weeks to 25 March, followed by Marks and Spencer, up 2.6% and the Co-operative, up 1.2%.

Of the big four, Morrisons was the only supermarket to see a year-on-year sales rise, up 0.6%.

The discounters continue to be the big winners, with figures from Kantar Worldpanel showing UK sales growth for Lidl and Aldi of 15% and 14.3% respectively in the 12 weeks to 26 March.

Kantar Worldpanel figures also revealed a 2.3% rise in the price of everyday goods which the firm attributes to ongoing inflation.

In terms of sales growth, ‘free from’ was the stand out category for the 12 weeks to 26 March according to Kantar, with 56% of consumers reportedly purchasing a ‘free from’ product over the period, pushing sales up 36% year on year.

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