THE REMOVAL OF

PRICE PROMOTIONS

Burger, donut, fizzy drink, chocolate
Burger, donut, fizzy drink and chocolate

According to Public Health Wales data, 60% of the Welsh population are overweight, and one out of every four children is obese by the age of 5. Pretty scary numbers.

The Welsh government have taken action with plans to introduce restrictions on meal deals with high fat, salt or sugar content, and bans on temporary price drops and multi-buy offers on the unhealthiest foods. The new rules will be in place in 2024.

The public response is divided. Advocates argue that it is long overdue, while opponents argue that individuals should have the freedom to choose what they consume. Similar changes in England have been delayed with the UK government pointing towards the cost-of-living crisis not being the right time to introduce such measures, though it looks like they are inevitable in the future.

In Scotland there are calls from campaigners to raise the minimum unit price for alcohol from 50p to 65p, so whatever your view on the rights and wrongs of the policies at a time when putting food on the table is difficult for so many people…changes are coming.

Dr Simon Moore, Chief Psychologist at behavioural science agency Innovation Bubble, thinks the ban will help stop consumers making “lazy buying decisions” based on a psychological tendency to prioritise immediate emotional satisfaction (financial savings), rather than thinking carefully about long-term consequences (our health). Dr. Moore also suggests that price promotions lure us into thinking that we’re “beating the system”, satisfying our need to feel smart.

It’s great news for the brand teams at health-focussed brands on whom the limitations won’t apply and will be free to promote as they wish….but what does it mean for brands at the unhealthy end of the scale?

Tactically, price promotions work. 65% of Brits find money off promotions appealing, according to the recent “What Brits Want from Promotions” research from Mando (with YouGov), making discounting the most appealing type of promotion.

But price promotions also damage brand equity.

Long-term repeated discounting in the open-market can lead to loss of brand equity in the eyes of the consumer. If it always costs less, then it must be worth less. Outside of the food space, take a look at fashion retailer “Gap”. In the 80s and 90s they were viewed as a premium high street retailer of quality clothing, but subsequent ongoing and constant sales meant no-one ever paid full-price, and brand value was decimated.

Life’s going to be a little more difficult for marketing teams of unhealthy brands in the coming years, but the new regulations create an opportunity for them to return to more creative and eye-catching executions of tactical promotions. The removal of price promotions as a tool will force brand teams to get more creative by incentivising purchase using relevant prizes, giveaways, brand/charity partnerships, loyalty-based campaigns, point of sale activity and more.

That’s a good thing, both in terms of healthy eating and maintaining the health of brands.

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