UK Government plans to bring in legislation banning BOGOFs and 3 for 2 on unhealth foods from April 2022, Scottish Government will likely follow suit, having already committed to bring forward the necessary legislation.
Consumers are likely to respond positively to this new legislation, as we know from our research that they want manufacturers and retailers to make it easier for them to make healthier choices. Only time will tell if they actually will in reality.
It was interesting to see that when asked what influences their decision to buy a product or brand, offers are lower down the list than I might have expected (it does vary by retailer, offers being more important to Asda shoppers than they are to Waitrose ones).
Our latest tracking survey also shows that 30% of consumers have made changes to their diets/lifestyles in the last 3 months for health reasons which is encouraging, however it is the 25% who feel they need to make changes but who haven’t, who are most likely to benefit from these restrictions.
It will be interesting to see how the categories affected by the legislation respond, these include, confectionery, cakes, biscuits, crisps and what mechanics will be used to drive growth. Shall we see the emergence of a real EDLP strategy for some or will the reality be that there is a greater emphasis on high/low pricing, with consumers tempted to still buy more than they need while they are offer (and then in most cases, consume more than they had intended)?
I know I for one always buy my favourite Greek yogurt brand when it is on offer, just switching from the 1kg pot to three 500g ones when I can see that they are better value. When asked what changes they (the 30%) had made for health reasons, it was encouraging to see the majority were consuming more fruit and vegetables but also interesting to see that younger consumers were cutting back on sugary drinks (free refills in restaurants are also prohibited under the new legislation).
This legislation does pose a challenge to brands who have relied on promotions to drive sales, it will be difficult to demonstrate to a trade buyer year on year growth. However, I guess there will be comfort in knowing that competitors in the category will have the same issue. It will be interesting to see if companies take a channel strategy and offer BOGOF’s in the independent trade where they will still be allowed. If this happens and consumers start to buy two chocolate bars on impulse instead of the one they intended, surely it will hasten the decision by the Government to extend the reach of the legislation?
With less than a year till this legislation takes effect in England, how should companies respond? By investing in the longer term, by taking a serious look at their approach to the ‘long and short’ of it. Given the compiling evidence put forward by Field and Binet, now more than ever companies should be investing in long term brand building and ensuring @60:40 budget split in their marketing budget and ensuring consumers really understand their meaningful difference and how they benefit from it.