Product promotional strategies in supermarkets and their effects on sales: A case study of breakfast cereals and drinks in New Zealand

Abstract

AbstractAimsTo examine the frequency of promotions on breakfast cereals and drinks in a major New Zealand supermarket chain, determine the healthiness of promoted versus non‐promoted products, and quantify the effects of promotions on sales.MethodsWeekly data on product promotions and sales were collected in six Auckland supermarkets for 198 breakfast products over 12 weeks. The healthiness of products was determined using the Health Star Rating system, and the effect of promotions on sales was estimated using linear mixed models.ResultsOn average, 47% of breakfast products in a given week were promoted using on‐shelf tickets, 12% in weekly mailers, and 9% via promotional displays. The healthiness of promoted and non‐promoted breakfast products was comparable. In relation to weekly sales of non‐promoted products, all three promotional strategies had substantial (2 to 2.5 times higher sales) and statistically significant (P < 0.001) effects on product sales.ConclusionPromotions are frequently used and effective at increasing sales. Marketing strategies focusing solely on promoting healthier products could be an important nudging strategy to improve the healthiness of supermarket food purchases.