Do consumers think special offers provide value for money?

Summary

Which? Research found: 

• Consumers are relying on supermarket offers to keep their food spending low and are positive about them if it gives them genuine value for money.
• Supermarket special offers are often encouraging stockpiling and bulk-buying food behaviours.
• There is some distrust around special offers and consumers question whether supermarkets are always offering genuine value for money.
• Distrust is often facilitated by a lack of understanding of special offers:
  • When supermarkets show a final reduction price, most consumers can recognise if the special offer is good value for money.
  • When supermarkets don’t show the final price after reduction or use discounts expressed as a percentage, some consumers struggle to work out if that special offer is worth the saving.

It is important that the offers used by supermarkets are clear and transparent. To encourage businesses to support consumers during the cost of living, Which? is calling for supermarket food pricing to be clear, fair and transparent and relevant for consumers throughout the UK. 

Introduction

The cost of living crisis is impacting everyone’s daily lives, especially when it comes to food prices - according to the ONS some groceries have increased by more than 20% over the past 12 months. With food prices going up it’s no wonder our Consumer Insight tracker revealed that consumers have significantly changed how they shop, with 85% of consumers trying to save money on food as a result of the cost of living crisis. To follow up, we conducted a series of online tasks with households on our Cost of Living Panel in October 2022 to understand the role that supermarket special offers played for consumers trying to save money on food.

A wide range of special offers available for consumers as they are becoming more reliant on them to save money 

 Previous Which? research has shown as costs continue to soar consumers are changing the way they shop looking for ways to cut costs. One of the most common behavioural changes seen is the increased number of households bulk buying and stocking up on food products. This was a behaviour frequently observed within our Cost of Living panel.  

“My garage is my pantry (...)I have an upright freezer in the garage, a chest freezer in the garage, and a freezer in the kitchen (...). My garage is just full of long-life milk. So that keeps me going.”

“I've always had good stocks of stuff because I live rurally (...) I go to the market and they would have pasta for 38p for an enormous bag (...). So really currently I'm cushioned from rising prices by virtue of the stocks that I currently hold.”

To facilitate these bulk-buying behaviours, consumers are turning to special offers as a way of maximising these savings. There is a range of special offers available for consumers, all offering different deals and ways of saving money:  

• Aldi price match 

“I did notice Tescos are Aldi matching on a lot of their things now which is good.”

• Loyalty card prices 

“I generally look for the Clubcard deals as you can some decent special offer deals on products that I like too, such as discounts off of meat and vegetables.” 

• Reduced due to the sell-by date 

“It was mainly targeted at food soon to expire.”

“They seemed to focus on perishables or stock that was out of season i.e. ice pops.” 

• Multi-buy

“Heinz 8pk beans and 6pk soup 2 for £8. Because in another supermarket 4pk is £3.50 so it's really a value for money.”

Consumers are making the most of special offers but there is a lot of distrust 

As consumers continue to rely on these special offers to save money, many are concerned that the offers aren't always providing them with a good deal. According to Which? research, 6 in 10 consumers don’t always trust special offers will be better value for money and this was mirrored by our consumer panel.

“You have to look at offers carefully. Often a single item such as baked beans is cheaper than a multi-pack of beans advertised as a Special offer.”

“They are probably good value with current costs but in comparison with what I was paying a few months ago I would say they are only average.”

“Sometimes they trick you. They say 2 for £1.50 but they are 76p if you buy 1.”

Alongside these concerns, consumers are often sceptical about whether supermarkets are actually acting in the best interest of consumers. When we asked our consumer panel about the extent households trust supermarkets to provide special offers that are good value for money, attitudes were very mixed, with some fears supermarkets are looking out for themselves.

 “I trust them to a point, where I think they overprice things to reduce it so it looks like they care that they’re saving you money, it’s probably to lure you in to buy more stuff or more often.”

“I think they are using offers to clear food that is either about to perish or out of season rather than focused on offers for customers that may benefit them i.e., staples such as pasta, rice etc which don't seem to go on offer.”

An inability to compare prices across competitor supermarkets to see if the special offer is better value can further add to this distrust. 

“Without having an independent product league table of live prices from all shops, you can only "assume" that a special offer you see in one supermarket is offering better value at that moment, compared to its usual price.”

This distrust may be facilitated by a lack of understanding of special offers 

Special offer scepticism can often be driven by whether consumers can understand the difference between a good value special offer and a poor value one. 

We found that our panel of consumers understood a special offer if the supermarket clearly showed how much the item was after the discount or offer had been applied. For example, one participant was happy with the bargain they received because they could clearly see the before and after price on a box of chocolates:

 “I have a Clubcard and I have seen a box of Ferrero rocher chocolates for £8.50 down to £5.90 which I think is a bargain when you look at the price difference.”

The clearer the price of an item post-discount the more likely it is that the consumer knows it’s good value for money. Yet when supermarkets fail to show these end costs, consumers become uncertain and feel less confident working out if the special offer is worth buying and will it save them money.

“Very difficult to understand if the ‘ when it’s gone’ neon sign is a discount because I couldn’t see a price reduction noted on the label but the neon sign was the same colour as the ‘ price cut’ offers so definitely made me think that the product was on offer.”

Some consumers said that percentage discounts (i.e. 10% off the original price) made it harder to work out if an item is good value for money if the final price was not provided. This is because it relies on the consumer doing the mental maths. By not showing the final value of a product after the percentage discount has been applied means consumers will need to take more time to work out the final cost whilst in a busy supermarket, causing consumer stress. In these circumstances, it’s difficult to access whether the discount is good value. 

Which? calls for clear and transparent pricing 

The research conducted with our Which? Cost of Living panel has evidenced that whilst for most it is easy to understand whether a special offer provides good value for money, a proportion of consumers find this difficult. As consumers are increasingly using special offers to save money, it is important that the offers used by supermarkets are clear and transparent. Therefore Which? calls for supermarkets to provide clear unit pricing for promotional offers in-store and online so that people can work out whether they really are the best deal.