Supermarkets See Increase in Special Sales – Beer, Cooking Oil… Food Items Account for 30%

Rise of Discounts: Supermarkets React to Consumer Thrift with Increased Sales Promotions.

Special sales of food items have been increasing at supermarkets. In January, the proportion of special sales in terms of sales quantity among 156 major food items exceeded that of the same month of the previous year. Many items have experienced a decrease in sales quantity due to inflation, and consumer inclination towards thriftiness has strengthened. Supermarkets are also moving to lower prices, mainly focusing on private brand (PB) products.

According to sales data collected from approximately 470 supermarkets nationwide by Nikkei POS (Point of Sale) information, the sales quantity when items are sold at prices lower than usual is aggregated as “special sales” for each store. In January, the proportion of special sales increased compared to the same month of the previous year for 52 items (33%).

 The Surge of Discounts: Beer Sales Lead the Way as Supermarkets Respond to Consumer Thrift”

“The increase in discounts has been significant, particularly in beer sales, where the proportion of sales promotions to total sales volume has risen from 41% to 78% compared to the same month last year. Similarly, edible oils saw an increase in sales promotions from 64% to 71%. The funding for these promotions is largely shouldered by food manufacturers and retailers.

According to Nisshin Oillio Group, ‘We speculate that the easing of raw material prices from the historical peak and the comparably favorable conditions compared to last year have made it easier for various distributors to offer discounts.’

While November 22 saw a decrease in the proportion of sales promotions in 97% of major food items, there has been a turnaround since the summer of 23, with promotions on the rise.

The Strengthening Trend of Consumer Thrift: Price Increases Result in Decreased Sales for Many Food Items”

“Consumer thrift has become increasingly prominent, particularly as certain food items experience a decline in sales following price increases. According to Nikkei POS data, in January, out of 156 major food items, sales decreased compared to the same month last year for 116 items (74%).

Yamaguchi Satoshi, President of Kagome, notes, ‘With prices rising across various categories, we’re seeing a trend towards thriftiness emerging.’ Sales of their flagship vegetable juice brand, ‘Vegetable Life,’ have declined following price increases and have yet to rebound.

The recent surge in raw material prices, triggered by Russia’s invasion of Ukraine, has somewhat subsided, leading to initiatives to lower food prices. Aeon lowered prices on 60 private label products in September and December 23.

Market analyst Kido Toshimitsu from research firm Intage anticipates that ‘amidst rising prices and stagnant real wages, consumer thriftiness is expected to remain strong in the future.

Source: Nikkei 11th Feb.