When rebrands go wrong

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Widespread discounting drives down UK shop prices

Widespread discounts and sales promotions by retailers drove down the average price of non-food items on the high street by 2.3 per cent in August.

High Street

The British Retail Consortium (BRC) says deflation for non-food is now at its lowest level since December 2008, with the August figure down on the 2.1 per cent drop seen in July.

Overall, prices were down for the fourth consecutive month, unchanged from the 0.5 per cent decline in July, with a 2.5 per cent rise in food prices not enough to offset drops in non-food.

The 0.5 per cent figure is the biggest for August since records began, with the month usually benefiting from higher consumer spending due to factors such as weather and school summer holidays.

The BRC’s director general, Helen Dickinson, says: “This is the highest August deflation since our records began.

“Discounts and promotions continue to be widespread for fashion and electricals, and health and beauty deflation is at a near five-year high thanks to an abundance of good deals on toiletries and cosmetics.”

However, this widespread discounting may not continue, with many brands looking to de-escalate the volume of price promotions as their wider marketing messages get lost.

Unilever, Dairy Crest and Arla butter brands are all seeking greater collaboration with retailers after deep discounting failed to trigger growth. 

Readers' comments (1)

  • Discounts and promotions are widespread across many sectors, particularly food and drink.

    Retailers keep turning to coupons as a way to attract and retain customers. They are competing increasingly for individual shopping trips in the face of consumer tendencies to switch shops in order to bag the better bargains.

    As a consequence, we’re seeing some really inventive promotions among retailers.
    Coupons form a core part of their promotional strategies and are used across activities such as loyalty programmes and price guarantees on individual products and baskets of products, both of which have proved very popular with customers.

    In fact, Valassis' latest figures reveal 275 million coupons, worth £850 million, were handed over at checkouts in the period from January to June this year.

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