Nielsen: Promotions down equals prices up in August

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Nielsen: Promotions down equals prices up in August

By Dan Ochwat - 09/11/2020

Nielsen has released an inflation study that showed consumers paid 4.1% more on popular grocery items in August 2020 versus August 2019. The report is line with the Labor Department’s release of the August Consumer Price Index, which shoed a year-over-year rise in the index of 1.3% — higher than the 1% jump seen in July. 

Nielsen told Store Brands that a reduction in promotions has been fueling a growing trend in the total cost of groceries pre-coronavirus and versus last year, and this includes in-store purchases, curbside pickup and home delivery.

Nielsen conducted an inflation study for its retailer and manufacturer clients and shared findings that included a drop in promotional offers leading to higher grocery bills. On average, 31.4% of all units sold in the United States are purchased on some sort of promotion, and, in August, 26.2% of units sold were done so on promotion — 5.2% below the average across the entire store. 

On average, 31.4% of all units sold in the United States are purchased on some sort of promotion, and, in August, 26.2% of units sold were done so on promotion.
Nielsen inflation study

The drop means shoppers have less opportunity to purchase items on sale and they’re paying more for items now than before the COVID-19 period, per the analytics firm.

In grocery, units sold on promotion were down 10% compared with the levels before COVID-19, and in household items, the drop is 12% of units sold on promotion versus before the coronavirus pandemic.

Though Nielsen noted that the meat department saw a resurgence of promotional activity, it didn’t have an impact on total basket expenditure and didn’t ease the cost for shoppers and their grocery bills.