The intense level of competition in the food retail channel is being reflected by increased resources aiming at attracting and retaining shoppers. The amount of retailers adverts have long been a barometer of this intensity and an analysis of these patterns reveals the retailers have some marked changes.
Adwatch reveals that when March 2016 is compared to the March 2015, the number of advertised promotions increased by 8%. There were also changes in the type of products involved in the activity and the level of change is different for each retailer. Fresh food exposure reduced by 2%, but within that meat promotions were down 22%, while vegetables increased 42%. The average price of vegetables advertised increased on the previous year from $6.60 to $9.83 per kg, reflecting the higher proportion of smaller convenient vegetable products being promoted in mutiple buy promotions. This impact is highly likely to have added value to the vegetable category.
Retailer activity level changes in the number of adverts shows increases for Coles (31%) and IGA (26%), and reductions by Woolworths by (16%) and Aldi (35%).
Despite the intense competitive conditions the vegetable promotional activity may well have encouraged more consumers to trade up to higher value products and therefore increased the category value.