Supermarket sales tactics

It's important to understand how supermarkets sell, sell, sell.
 
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  • Updated:5 Jan 2009
 

01 .Introduction

Shopping trolley full of numbers

In brief

  • Be aware of the tricks and traps supermarkets use to get you to part with your cash.
  • Impulse buying accounts for a significant proportion of supermarket purchases. Planning your shopping beforehand and making a list will help you resist. Our tips can save you money.
  • Don’t let discounted petrol or other loyalty schemes control where you buy – consider how much you're really saving.

Major supermarkets are just about everywhere, and according to the market research company ACNielson, the primary appeal is "one-stop shopping" — everything you want under one roof. Apparently we love them, but how well do we understand the modern supermarket and its sophisticated sales strategies?

Setting the traps

Consumer research shows that we’re vulnerable to subtle — and even not-so-subtle — marketing techniques. Impulse buying accounts for a significant proportion of supermarket purchases.

Here are some of the tactics used by supermarkets to encourage you to spend more than you might have planned to:

  • In your face: More expensive items tend to be right in the line of sight of the target consumer. Cheaper or supermarket own-brands tend to be located on the higher or lower shelves.
  • Sensory delights: It’s very common to position attractive fresh produce or a bakery at the entry. Does the deli section with its medley of colours and tasty offerings then follow? The aim is that the sights and smells grab your interest and put you into shopping mood as you’re led through the labyrinth to the less interesting packaged dry goods and the strategically placed impulse-buy items.
  • Where are the eggs? Probably nowhere near the milk or bread. Separation of popular staples is a common element of supermarket design. Why? So you’ll spend more time in the store negotiating your way past all those flashy and tempting impulse-buy items.
  • Sacrificial lambs: Supermarkets, particularly those with strong local competition, offer "loss leaders" — heavily discounted and advertised goods that are designed to get you into the store. The idea is that you’ll pick up a few more items while you’re there. And don’t be surprised if you find them near high-cost glamour products.
  • This goes with that: Positioning natural combinations like chips with dips or biscuits near tea and coffee may seem logical, but is it any wonder that it increases the sales of both?
  • The trouble with trolleys is that it’s very easy to fill them up. If this is you, consider carrying one or even two baskets instead — you’ll find the weight of all those impulse buys good for discipline.
  • Super specials? Appearances can be deceptive. Are those cosmetics in the bargain bin at the end of the aisle really discounted?
  • Checkout tempters: Magazines and confectionery live here. How many times have you succumbed to the temptation or been nagged into buying by your kids?

What the research says

  • Research also suggests that grocery shoppers are heavily influenced by instore displays, particularly at the end of the aisles and at the checkout. Keep this in mind when navigating through the store. Don’t assume they’re automatically a special offer — compare their price with the same items that aren’t being promoted.
  • At the Food and Brand Lab, University of Illinois, researchers found that promotions using multi-unit pricing such as three for $3, purchase suggestions such as "stock up for Easter", or with purchase limits such as "limit three per customer" increased the amount consumers purchased. “All three types of promotion increase purchase amounts by 30% to 105% over what consumers would normally plan on buying,” it said.
  • Other research showed that more than 50% of shoppers couldn’t resist a buy-one-get-one-free promotion. But did you even need one in the first place, never mind two?
  • A study published by the American Psychological Association showed that even the choice of instore music influenced shoppers’ wine selection. Over a two-week period in an English supermarket either French or German music was played from a display of wines from these countries. When the music was French, sales of French wine increased; when it was German, sales of German wine increased. When questioned, shoppers seemed unaware of the effect the music had had on their wine purchasing.
 
 

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02.Petrol and loyalty schemes

 

Petrol deals

Back in 1996, Woolworths was the first supermarket to announce plans to sell petrol, and also the first with a discount offer of four cents per litre for spending $30 or more at any of its stores.

The move into selling petrol isn’t just a diversification into another product: think one-stop shopping again. One retail industry expert said supermarkets see the move as an opportunity to increase "share of stomach" sales by improving the “poor retail offer by traditional petrol retailers”. Coles told us that petrol and grocery retailing “are now converging”.

What they mean is that when you stop to fill up at their petrol stations, both Coles and Woolworths hope you’ll also make a few quick grocery ‘splurchases’ at the convenience store there. There’s a trap, of course: grocery items tend to cost more at these shops than in a normal supermarket.

But how much are you really saving with the petrol discounts anyway? According to Australian Bureau of Statistics figures, motorists used an average of 26.5 L of petrol a week (based on the latest 12-month figures, November 2006 to October 2007).

That's a saving of $1.06 per week with the discounts — an amount that could easily disappear on one impulse buy.

Make sure the petrol offer works in your favour.

  • Get a feel for prices at supermarket petrol outlets, try to resist impulse buys there.
  • Don’t drive out of your way to collect the 4 ¢/L discount.

Loyalty schemes

All loyalty programs are designed to encourage you to buy more in a particular store — and we must fall for them, or the companies wouldn’t spend money to run them. We'll be taking a close look at the value of loyalty schemes in the near future. In the meantime, check out our comparison of store rewards credit cards.

03.Avoiding the traps

 

How to avoid the supermarkets' traps

Research indicates that a sizable number of shoppers decide which supermarket they’ll shop at based on specials advertised in store catalogues. It’s not a bad shopping strategy, particularly if the specials were items you were intending to buy anyway. These are often the loss leaders noted in Setting the traps.

Our most recent Supermarket price survey (2007) confirmed this: specials made a huge difference to the cost of our basket at the big two supermarkets. Overall, ALDI was by far the best value — it's basket cost half as much on average.

Other smart shopping tips:

  • Make a shopping list — soooo boring, but it’s the key to avoiding impulse buying.
  • Meal planning also helps you focus on the things you really need — and helps to get your shopping list written.
  • Get to know your local supermarket layout well — you’ll be able to zero in on the things you really want and ignore tempting distractions. Researchers in the US found that shoppers who were unfamiliar with supermarket layout but had plenty of time had the highest rates of impulse buying. The research suggested this was because you have time to process more instore information, which promotes unplanned buying.
  • Don’t go shopping when you’re hungry, bored or depressed.
  • Unit-pricing is on it's way, but until it arrives in your store, take a calculator to make good price comparisons between different pack sizes of the same item — particularly important if something’s being promoted in an instore display that makes you think it’ll be cheaper.
  • Don’t blindly buy familiar brand names. Try ‘no-name’ and supermarket own-brands — you’ll definitely save money if you can live with any quality difference. Staples like sugar, salt and flour tend to be hard to pick from branded equivalents. And our recent report on premium own brands suggest they compare well to familiar favourites.
  • If practical, use a basket instead of a trolley, so that you can’t load up too much.
  • Supermarkets know kids make great shoppers. If you can’t go shopping without them, try and keep their minds off lollies and other temptations by keeping them occupied with learning activities like counting and identifying vegetables and fruits.