The impact of alternative promotion strategies on the spirits category: evidence from the UK

Abstract

There has been a general increase in the use of promotions within UK multiple grocers over recent years, during which the spirits category has grown in both volume and monetary terms. The results from an econometric analysis of weekly cross‐sectional store data and cluster analysis of consumer panel data suggest that promotions have had a slight positive impact on the volume of sales, particularly over the seasonally important Christmas period. However, some promotions, especially multibuys, appear largely to reward loyal buyers, doing little for either volume or monetary growth of the spirits category. Other promotions, such as price and gift offers, appeal more to consumers who do not purchase spirits so frequently and also attract people who are less brand and store loyal. The case study provides clear evidence of the differential impacts which different promotional methods have on sales growth and the need to carefully target different promotional offers to different groups of buyers.