Energizer to cut back on “unsustainable” price promotions
The company that owns Energizer and Wilkinson Sword is reducing promotional activity because the current depth and breadth of supermarket promotions is “disastrous” for long term brand strategy.
The company says that it is willing to sacrifice short-term share to secure the long-term strength of its brands and the category by positioning itself on more than price.
Nick Powell, managing director of the company, which also owns the Hawaiian Tropic and Banana Boat sun tan lotion brands, has hit out at the “unsustainable intensification” of promotional activity in recent years that is damaging category and brand value.
More than 40% of Energizer’s products are sold on promotion, with offers such as buy four get four free common on batteries in particular.
Energizer is reducing promotional activity and adopting alternative methods, such as s value adding partnership with Help for Heroes to donate to the charity for every pack purchased, in a bid to offer consumers good value and give the brand cut through without damaging the brand’s long term band health.
He says: “Over the past two to three years, and particularly the last 18 months, there has been an unsustainable intensification of the depth and breadth of promotional offers that is damaging the overall category value and isn’t sustainable.”
“Our premise is simple, if it doesn’t stimulate sales or growth you’re just walking your brand value out the door. It’s too deep and too wide and we’re at the point where we’re educating consumers to only buy things on deal.”
His comments echo those made to Marketing Week in July by Heinz chief commercial officer Matt Hill, that the “dramatic acceleration” of steep price promotions is destroying category value.
A number of FMCG brand owners such as Procter & Gamble and Unilever have indicated a desire to cut back on promotional spending and increase prices to manage the balance between volume and value sales.