Enhancing Food Promotion in the Supermarket Industry - a Framework for Sales Promotion Success

Lisa S. Simpson
University of Otago

SALES PROMOTION IN THE FOOD RETAIL INDUSTRY

In the food industry, an increasingly large proportion of retailer and manufacturer marketing budgets are allocated to retail sales promotion (Low & Mohr 2000). Some of this increase is attributed to changes in consumer purchase behaviour, with greater levels of impulse buying and value seeking making sales promotion a more effective means of reaching the supermarket shopper (Peattie & Peattie 1993). Other explanations for the increase include the 'snowball effect', where, due to the commonality of sales promotions among competitors, many firms are forced to follow suit in order to maintain market share (Peattie & Peattie 1995). This increase in the use of sales promotion in the food industry gives rise to the questions of what, exactly, are the benefits of using sales promotion in food retail and how these benefits differ for manufacturers and retailers.