BOGOF R.I.P. - A sideways swipe at waste?

With Asda re-discovering its Walmart roots by ditching multi-buys, and Sainsbury’s clearing the multi-buy shelves by Summer, Tesco and Morrisons will not risk looking odd by comparison, meaning 'Hello EDLP....'

Eliminating multi-buys, means less scope for waste, matching purchase with need, simpler pricing helping shoppers identify real value, prices moving to EDLP, with Stelios establishing new levels of Low @25p…

In fact, best to see it as part of a war on waste, coupled with a move to supermarkets donating excess produce to charity, people eating less, in a move to healthier living…

Meanwhile, consumer-shoppers have to sharpen their savviness by getting their heads around Unit Pricing - you really think they all understand it? - with supermarkets playing their part by emphasising price per unit, AND PRINTING IT BIGGER…

Finally, joining all the above dots, NAMs, having been spared the task of trying to make a multi-buy seem profitable, now have to focus on growing at the expense of competition within the resulting flatline - or even falling - demand in many categories…

Converting BOGOFs to BOGOFs: Buy-One-GIVE-One Free?

Students from Queen Elizabeth Hospital in Clifton have developed a clever solution aimed at reducing the mountains of grub going to waste every year, while helping deliver more meals to food banks. They say online supermarket customers should be given the option of sending one of their BOGOF items directly to food banks.

In fact, given that those who have to resort to food banks are also in need of all the other aids to wellbeing that we promote in our advertising, why not extend the idea to all online BOGOFs, and really make a difference…?

Nigel's BOGOF: Something for the weekend?

Nigel's BOGOF?
Given the inclement weather throughout the UK and Ireland, possibly causing many of you to be confined to home for the weekend, and realising that our normal Namnews fare may be insufficient to occupy you for the next two days, we offer you something slightly different, based upon our mutual interest in shops and shopping behaviour….
Welcome to the cautionary tale of BOGOF-Nigel, a gentle man who simply tried to play by the retail rules..
Have a slightly different weekend, from the Namnews Team!

BOGOF: A fair share of the losses?

Persuading your customer to forego their retail margin on the free item can help, but you both lose money!

This example shows where a retailer and a supplier decide to jointly fund the BOGOF promotion. This means the supplier will supply the free item ‘free of charge’ to the retailer, who in turn offers ‘buy one, get one free’ to the shopper for £10. The supplier makes a normal gross margin of 50% (in other words they can manufacture the product for 50% of the price to the trade). The supplier also makes a normal net profit of 10% on normal sales.

Meanwhile, the retailer makes a normal trade margin of 25% of shelf prices, ex VAT, has handling costs 0f 10% and overheads of 10%, leaving 5% net profit. As you know, state-of-art retailers normally have a net profit of 5% of sales, ex VAT.

In this example, where the retailer gives up his gross margin on the free item, and the supplier provides the free item free-of-charge to the retailer, it can be seen that the retailer loses £0.75 per item, or £1.50 per BOGOF and the supplier loses £1.50 per item, or £3 per BOGOF sold.

Obviously, this means that both parties will lose money on every BOGOF promotion!

Fairshare negotiation can help…

See yesterday's post below for when the retailer refuses to forego the retail margin!

Tesco's BOGOF ATM

News that a Tesco cash dispenser had suddenly begun to issue double the money requested, was widely regarded as a one-off accident….

However, suppose that this was part of a much bigger Tesco banking agenda, a trial of a new idea in grocery-banking - BOGOF cash dispensing to announce Tesco's upping of the ante in the banking category?

'Obviously' an exaggeration (?), but having taken the creative leap via a 'daft' first step, how about Tesco programming their ATM network to randomly dispense a cash-bogof to lucky ATM customers around the country in order to drive traffic to their machines, and promote their 'no-brainer' escalation of their banking activities (think 25% share, fast, with government encouragement, Darling; banks still not aware of the scale of their recent 'own goals', and a public determined to 'get even' )

Sure, the banks could copy the BOGOF-promo idea, (or complain to their MPs about abuse of public trust !) but with nothing like the same impact, since we don't trust 'regular' banks anymore, do we?

Have a Tesco-weekend, from the Namnews Team!