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TheFinancialReview

National Agenda

Coles reviews promotions as suppliers 'waste' $10b on discounts

Coles is reviewing its promotional and pricing strategies after admitting it had struggled with its 10-year quest to shift shoppers and suppliers towards 'everyday low prices' rather than discounts.
Australia is the most promotional food and grocery marketing in the world, according to Nielsen, with 38% of products sold at a discount in the year to date. 
Justin Sargent, Nielsen Pacific – We spend more on promotions in Australia than any other country around the world and a lot of it is inefficient 
Promotions cost the sector $51 billion a year but $10.1 billion of that was ‘wasted’ because consumers would have bought the products at a full price and the discounts didn’t generate extra sales or volumes.

Takeout

Australia is the most promotional food and grocery market in the world.  Questions are now being asked on the effectiveness of this strategy for both retailers and suppliers.