Heinz chief hits out at price promos
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Heinz chief commercial officer Matt Hill has hit out at supermarkets for “destroying category value” through steep price promotions.
He says the “dramatic acceleration” of promotional activity across the supermarkets means that 40% of grocery sales now come from deals - up from 30% three years ago.
“Retailers are driving footfall promotions that are incredibly deep, such as ’buy one get two free’, which while driving footfall is destroying category value,” he says.
Hill adds that Heinz’s growth strategy centres on launching product innovations that grow the category, such as brand extensions which invite new users to the category, offer new benefits or create new uses.
“Marketers are best focussed on what will grow the category. You look at [consumers] needs and how you can meet them better. If we do a better job of growing the category and meeting needs that the other guys, then we will grow our share too.”
In the past year Heinz has launched variants such as lemon and black pepper Salad Cream and HP Sauce with Guinness and Balsamic Ketchup.
Readers' comments (2)
Malcolm Wicks | Mon, 8 Aug 2011 12:52 pm
It's clear that brands and retailers don't like so many deep price cuts and offers. Not only do they give away margin but they can also be very disruptive to internal systems that potentially hit margin even more.
The challenge is to find alternative ways to attract customers to a store and make the "right" purchase decision at the shelf edge. In my view a key part of this approach is providing customers with information that they will value above price. A key component will be to provide tickets that "Sell" at the shelf edge rather than counting on price cuts.
The next battlefield will be which brands and retailers can add the most value to customers by working together. It's all about marketing.
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Brett | Tue, 9 Aug 2011 11:32 am
I loosely touched on this yesterday about better ways for marketing to grow their brands other than price point.
http://packagedwrappedandslightlyopinionated.blogspot.com/2011/08/when-limited-becomes-new-limitless.html
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