The cut price war started in supermarkets. Signs are multiplying “promos” to cut prices. But who pays for it, and who really wins?
Immediate discount, a product purchased the second free, second item at – 60% or blocked price… On the shelves of supermarkets, promotions are everywhere. For customers, they are essential today. “€1.59/kg, I find it interesting so I take”says a customer. “Chocolates, for example, two plus one free”said another.
In the supermarket where we made our report, up to 100 products are cheaper today. But are these discounts really interesting? Who decides and who finances these commercial operations? To understand it: go to the headquarters of the brand. This is where everything is negotiated before shelving.
The director and his sales team review the next promotions, but also those for the summer, to notify suppliers in advance. How are the products chosen? It all depends on the season. “Asparagus is typically a seasonal product. So here we are going to put it in all our formats because it is suitable for all types of customers. It is something that is expected. We are also adapting our promotions , we look at what our competitors are doing, of course. It’s very important, we are in a very competitive market”explains Eddy Gendronneau, director of sales development at Carrefour.
For this week: minced pork and beef goes from €9.50/kg to €9.95/kg with 6 bottles of all-inclusive passata. And it is the brand that pays. “Everything is profitable. That’s a basic principle, but we sometimes, and often in promotions, eat up part of our margin to please our customers”underlines Nathalie Matterne, merchandise director at Carrefour.
The brand relies on volumes. This is the case for strawberries: low margins, but the customer buys a lot more. “There, I said to myself that at that price, 5 euros for the two trays, it’s about 4 euros everywhere so I think it’s a good deal”slips a client.
So are consumers winning? For this specialist: the system has its limits. “Today, the goal for large retailers is not to make a lot of money or to make big margins. The goal is to keep their model alive. Ultimately, it’s a cycle which risks putting everyone at a disadvantage. In the short term, it’s interesting because it attracts the consumer. In the medium term, it’s an economic system that simply cannot hold up.”develops Pierre-Alexandre Billiet, economist.
Making profits is therefore almost secondary today. You have to attract the customer at all costs. According to a study, over the past month, nearly half of consumers have purchased products on sale.
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