Sainsbury’s abandons multi-buys from August
Sainsbury’s has committed to phasing out multi-buys – including on beers, wines and spirits – across its stores from August.
“The phasing out of multi-buys is a continuation of Sainsbury’s pricing strategy to deliver lower regular prices,” it said, adding that its customers has “responded positively to the gradual removal of multi-buys over the past 12 months in favour of lower regular prices.”
Since October 2014, the retailer has gradually reduced multi-buys across its stores, and last month chief executive Mike Coupe praised the reduction in vouchering and promotional activity as he announced strong Christmas trading results. He argued the investment in quality and price had driven growth in transactions and volume sales – and Sainsbury’s was recognised as one of the winner at Christmas, along with Lidl and Aldi, by KantarWorldpanel.
Sainsbury’s was not able to supply db with specific information on BWS multi-buys, but confirmed that it has reduced the level of multi-deals by around 80% since this time 12 months ago, when the level was around 1,000 per week.
However, it added that there would be “a few exceptions” where multi-buy promotions would be used at “certain times of the year”.
The commitment is the latest in the evolving pricing strategy of the major retailers as they grapple with the changing retail landscape and seek to compete with the discounters.
Speaking to the drinks business earlier this week, Richard Evans of Dedicated Wines said the retailers’ abandonment of multi-buys and move towards round-pricing was effectively a no-brainer.
“The retail price gap between the supermarkets and the discounters got too great and it was too big [for consumers] to ignore,” he said. “With multi-buys, it increased the price of your basket, so the perceived difference was that the discounters were much cheaper. But now they have closed the gap between them and stopped the high low promotions – so now there are fewer reasons to go to the discounters than there were a year ago.
In the latest figures released this week, the Sainsbury’s increased its market share to 16.8% in the 12 weeks to 31 January, on the back of a 0.6% increase in sales – the sixth period in a row that it has increased sales.
In October, rival Tesco adopted a fixed price model of practice, as it cuts the number of wines on shelf by 27% to 660, while specialist wine retailer Majestic removed its six bottle minimum and last week slashed the price of its single bottles of wines.
In 2014, data from Neilsen showed wine to be one of the most heavily discounted categories, with almost six bottles in every ten sold on promotion.