| 3.9°C Dublin

Food giants must tread carefully, price-cutting can damage the brand

Irish shoppers like to buy the odd treat and are only too happy to pay a little extra for quality. But we are becoming more discerning when it comes to in-store promotions.

If the likes of Dunnes Stores and SuperValu run promotions focused only on price, they run the risk of lowering the brand's value – so says a shopping report by Nielsen for TAM Ireland.

While chasing the price-sensitive shopper may pay off today, it can harm brand equity tomorrow.

Speaking at an Association of Advertisers in Ireland (AAI) breakfast, TAM chief executive Jill McGrath (pictured) said that while Tesco and others are seeing sales of private label brands increase year on year, price is not the only driver.

Nielsen's Ad Spend report shows Aldi and Lidl increased their advertising by 29pc and 49pc respectively. Both German discounters invest a large part of their yearly ad budget on TV.

McGrath says Irish consumers want to believe in brand values, but without proper investment in media advertising, the message can get lost.

Online

The latest Carat Pulse report shows 95pc of consumers have shopped online, which is up by one point on this time last year.

Carat's Dael Wood says the trend is spread evenly across age groups, peaking with 35-54-year-olds.

So why do people like to shop online?

Trust, price and presentation are said to be the three main reasons. As well as these drivers, a simple sales process – from choosing to paying for goods – and easy return policies are seen as important. Traditional media still prompts most online purchases, the Carat report added.


Privacy