enhancing food security and physical activity for maori, pacific and ...

Enhancing Food Security and Physical Activity for Māori, Pacific and Low-income PeoplesPromotions are a commonly used supermarket marketing strategy that have potential tobe used to reduce the cost of healthy food. Sales promotions are defined asinducements to increase sales by offering extra value or incentives to the customer. 79Sales promotions are usually temporary and of short duration (typically one to fourweeks). Examples of sales promotion techniques include price reductions, loyalty carddiscounts and/or points, coupon discounts, multi-buys (eg, buy one get one free(BOGOF), three for $5), quantity deals (25 percent more), link saves (buy one productand get a discount on another), in-store tastings or demonstrations, rebates, contests,sweepstakes and free samples. Loyalty cards have also given supermarkets the abilityto target promotions directly to individual consumers. 47Sales promotions are an important merchandising tool, accounting for 30-40 percent of80 81supermarket sales in the UK and United States. Their effects are so immediate andtangible that some retailers spend more on sales promotions than on advertising. 82Supermarket sales promotions substantially increase sales volume, with the magnitudeand duration of the increase dependent on the sales promotion method, price reductionand product category. 79 83-85 The average increase in grocery sales is estimated to be200 percent in the UK, with BOGOF offers increasing sales by up to 3000 percent. 80Sales promotions are often accompanied by displays and/or advertising whichsignificantly enhance the effectiveness of price reductions. 82Sales promotions have a noticeable effect on customer behaviour, altering the timing79 82and quantity of purchases. Common behavioural responses include store switching(customers shop at a different store to usual), brand switching (customers buy a differentbrand within the same category), purchase acceleration (customers purchase a productat an earlier time), stockpiling (customers buy more product and store this), product trialor simply buying more for immediate use. 86 Behavioural responses vary by promotion86 87method. For example, price discounts are more likely to result in purchaseacceleration, stockpiling and spending more. BOGOF offers induce both stockpiling andpurchase acceleration, but are less effective at encouraging additional spending. Instoredemonstrations and tastings are most effective at encouraging product trial.Supermarket sales promotions appear common in New Zealand. The Woolworths onlineshopping website 88 lists over 2600 products as ‘specials’ (discounts and/or loyalty cardpoints), representing 20 percent of all products and probably a higher proportion ofsales. Approximately 1400 of the products on “special” were foods or non-alcoholicbeverages. Because not all products are listed online, the number of in-store salespromotions may be even greater. Supermarket sales promotions are generally offerednationally, 89 although anecdotal reports suggest individual supermarkets may have somediscretion regarding 10-20 percent of promotions in New Zealand supermarkets. Owneroperatedstores may have more discretion to run promotions on a store-by-store basis.There is a lot of potential for promotions to reduce the cost of healthy food, provided theright foods are promoted. In a review of food sales promotions, Hawkes 38 concludes thatsales promotions for healthy foods need to be designed very carefully to ensure thatthey increase consumption in the target groups or broaden the customer base, ratherthan just leading to switching of brands/types, switching stores, or increasing waste. Itshould also be noted that core foods tend to have a lower profit margin than processedfoods, and this is likely to impact on the level of price promotion implemented.114