A micro-analysis of the influence of retail promotions on the healthiness of breakfast cereal purchases.

Abstract

An unhealthy diet is associated with obesity, negative health outcomes and increasing public costs such as health care expenses and unemployment. A lower socio-economic status population has a higher incidence of obesity, yet it is these groups that are most susceptible to food marketing tools. One common tool are retail promotions such as temporary price reductions and multi-buy offers. This study investigates retail purchases made under different promotion types through the lens of the retailer and the consumer. The aim of the study is to examine the influence of retail promotions on sales and purchases of healthy and less healthy breakfast cereals. Further, it investigates the role of retail promotions on improving the healthiness of purchases and the evidence whether promotions can encourage healthier eating patterns. In order to achieve the above-mentioned aim, the study employs a sample from Kantar Worldpanel scanner data using Scotland as a case study across breakfast cereal purchases. The primary contribution of this study is adding knowledge to the food economics literature on the role of retail promotions and the main novelty is that the study investigates across different retail promotion types and their influence on sales as well as purchases. The study examines price and volume promotions across the perspective of retailers, consumers, and policy. Further, this study uses the UK FSA nutrient profiling score to assess the healthiness of each product in the dataset linking less healthy dietary patterns to ultra-processed foods analysing the whole food category breakfast cereals. The research results have a number of policy implications that can help shape consumer’s diets for the better through improving the market environment by promoting healthier products. The results indicate that retail promotions are more likely to be applied to less healthy breakfast cereal products across both price and volume promotions used by the retailers. Moreover, the results reveal that both retail promotions increase purchases and therefore, the consumption across households. Further, both retail promotion types decrease the overall healthiness of households encouraging the healthiest and least healthy households to purchase unhealthier breakfast cereals – therefore retail promotions impact the diet of consumers and might be one factor contributing to the obesity crisis among adults and children. Strict regulations through the UK government are necessary to have a stronger impact with policy implications identifying practical strategies and enabling healthier food shopping which will help improve consumer diets in the long term. The results clearly show the potential for promotions in a pro- health strategy and one policy approach might be to restrict retail promotions on less healthy products and at the same time encourage price reductions and multi-buy offers on healthy products only. The thesis informs on the debate of the role of different retail promotion types in unhealthy eating and provides evidence on the potential for price discounting to promote healthier eating patterns, particularly among socio-economic groups exhibiting the poorest diets.