BOGOFs Bounce Back
"Every day low prices" and "every little bit helps" are straplines for two of Britain's biggest supermarkets. As consumers are struggling to make ends meet and adjust to what has been called the end of cheap food, lower prices were allegedly going to replace special promotions.
According to trade magazine The Grocer, however, the idea was short-lived. Buy-one-get-one-free (BOGOF) deals reappeared within weeks of analysts announcing their demise.
The Daily Telegraph reported that The Grocer's survey of promotional items revealed BOGOFs totaling one third of all offers on the weekend of May 10 and 11, up from 19 percent in the first three months of the year. During the first quarter, Tesco had reduced the proportion from 36 percent to 12 percent. Sainsbury's apparently stuck with them, though, increasing its percentage of BOGOF promotions from 30 percent in the year to date to 65 percent for the weekend studied. Other supermarkets were following Sainsbury's lead, according to The Grocer.
"Despite BOGOFs having shown signs of declining in popularity in other multiples, last weekend Tesco, Morrisons and Somerfield all had BOGOF as their primary mechanic," The Grocer reported.
During the previous week, several retail industry experts had predicted the demise of BOGOFs. The analysts felt pricing would shift to straight price cuts as consumers seek to control their overall spending and look for ways to cut down on food waste.
By way of explanation, The Daily Telegraph attributed the return of BOGOFs to the credit crunch, which has increased the need for stores to entice shoppers to part with their money.
Discussion Questions: What do you think are the pros and cons of BOGOF (buy-one-get-one-free) offers? What is their impact on traffic and margins?