Buy one get one free offers losing appeal at Tesco and garden centres

Tesco is moving away from BOGOF - buy one get one free - promotions and other deals in favour of price cuts, which is the model used by Aldi and Lidl and one that garden centres could follow.

The supermarket is to focus on an "everyday low prices" strategy. Tesco is the last of the big supermarket chains to move away from promotions.

The move could help its dealing with suppliers, after Tesco was rapped by the Groceries Code Adjudicator last month after an investigation into code breaches such as alleged delayed payments and demanding payments from businesses for more prominent positioning of products within stores.

Garden centres frequently use BOGOFF promotions for meals and items such as bulb packs, compost and bedding - but some garden retail experts think the pricing strategy should end.

Former The Garden Centre Group chief executive Nicholas Marshall said customers are "sick of BOGOFF" offers and want straight discounts without any complicated pricing. He said he wants to campaign on the issue, which he believes annoys some customers.

Latest figures are set to show shop price deflation continuing at a similar level in January to December's two per cent.

Mdj2 associates director Andy Newman said: "As customer habits change the types of promotions they are open too also changes, and it looks like this is especially true in supermarkets. It's been noticeable that BOGOF deals have been less visible for a while, but you can still see plenty of multi-buy promotions in the big supermarkets and I wouldn't expect this to change anytime soon.  

The analysis that Dunnhumby can provide Tesco with is extremely powerful as they will know how sales elasticity varies by products - as any retailer knows some products respond much better to promotional activity than others.  Within garden centres customers still respond very favourably to multi-buys, especially on bedding plants (e.g. 2 for £5) and compost (e.g. 3 for £12) and I would argue that in many cases you will not generate more sales by lowering the single item price.

Ultimately the best promotions always have been, and always will be, about psychology - motivating customers to do something they weren't otherwise going to do."

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