Ed Griffiths

Ed Griffiths

It’s important as we begin the new year to cast an eye back over the recent past and take stock of the lessons learned in produce.

The broader grocery sector has now seen several years of retailers reining in their promotional offerings, following in the footsteps of their discounter competitors. Within fresh produce, this strategy seems to be working: over the past five years volume sales of fruit and vegetables have increased by 9.3 per cent while consumer engagement with promotions has declined. So does 2018 spell the end of promotions in the sector?

Looking more closely at how the population is responding helps shed some light on what we might expect to see this year.

A move away from ‘X for £Y’ multibuy promotions hasn’t hindered the growth of fresh produce among families with young children, who have increased the volume of fresh produce that they’re buying by 16.3 per cent compared with this time five years ago. While still susceptible to price-marked promotions as they look for cheap ways to feed extra mouths, the overall decline in promotional activity by families is as much of a reflection of their changing retailer repertoire as it is the change in strategy deployed by the traditional grocers for the majority of the year.

Meanwhile, retired households are flouting the trend and alongside empty nesters are one of the only groups to have increased their promotional spend, albeit modestly, stemming from minimal historic interaction. In tandem, volume sales of fruit and veg among older households have grown by 10.5 per cent over the past five years, with this contrast in behaviour showing there’s no one-size-fits-all approach.

The discounters’ strategy of favouring everyday low pricing over promotions continues to perform strongly – Aldi and Lidl’s double-digit growth in the overall market is matched by a 16.6 per cent growth in fresh produce over the past year. However, the traditional retailers would be wise not to assume that simply emulating this strategy is enough to achieve success – what’s working now may change tomorrow, and shoppers still value price over other drivers of behaviour.

If mainstream retailers are to win back share from the discounters it will likely be through pricing activity, so it’s too early to call time on promotions just yet.