Nielsen: Promotions down equals prices up in August
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.
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.