Rising prices mean falling sales volumes. We’re seeing it everywhere in grocery retail right now. But not across the board – some categories have actually grown over the past year. “With the right campaign planning, you can come out of inflation a winner,” says Anna Ekström at NielsenIQ.
Inflation, rising fuel prices, the war in Ukraine, reduced availability of raw materials and interest rate rises – all these external factors are contributing to the price increases we are now seeing in grocery retail, which in turn are leading to falling sales volumes. But some categories have bucked the trend – thanks to smart campaign initiatives.
When NielsenIQ studied campaign volumes over the past year, it turned out that eggs, functional drinks and snacks, among others, are some of the categories that have been able to win back declining sales with the right campaigns. An important reason for the increase is that these categories have had a strong focus on price promotions of various kinds, says Anna Ekström, Commercial Lead for the Nordics at NielsenIQ. Because if there is one thing consumers look for in times of inflation and rising prices, it’s good offers.
“We’re seeing a clear trend right now where consumers are looking for cheaper alternatives to the products they normally buy, either by looking for special prices and coupon campaigns or by switching to cheaper alternatives and private labels,” she says.
When the world is in turmoil and sales figures are heading downwards, it is easy to pull in your horns and cut back on sales activities. But Anna Ekström points out that the old saying “you can’t brake your way up a hill” still applies.
“I think that even products that don’t normally use coupon campaigns, targeted offers and similar activities could benefit greatly from them in times like these, when customers are hunting for bargains. Put simply, campaigns are a good way to win back faltering volumes.”
One difference, when you compare Sweden with our Nordic neighbours, is that Swedes are often loyal to a particular store and chain. In Norway and Denmark, by contrast, consumers more often choose a store based on the offers it has. This loyalty is an opportunity for suppliers, says Anna Ekström.
“Swedish consumers may prefer to go to the same store every time they shop, but they are also more open to influence once they are there. So a supplier that invests in being visible in store with campaigns has a lot to gain.”
Stores also benefit from suppliers’ campaigns, says Anna Ekström.
“Right now, consumers are on the hunt for good prices and offers. As a store, it’s important to respond to this by having lots of good offers and coupon campaigns. Otherwise you risk even losing your loyal customer to another store with better offers.”
But even though successful campaigns are an important factor in maintaining, and even increasing, volumes in times of crisis, there is no general campaign solution that suits every product category, says Anna Ekström.
“You need to know your brand to get it right. This isn’t about ‘one size fits all’. The type of campaign that suits one category may not be right for another. So it’s important to do your research and be prepared so that you do the right things.”
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