UK is bargain-hunting capital of Europe

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David Cameron in Asda

British shoppers are the keenest in Europe on a bargain, with 59 per cent of non-food items bought at a discount.

Items under promotion now account for 55 percent of food items, according to market research company IRI. Alcoholic drinks are the most heavily-promoted, with 69 percent bought on offer, followed by confectionery at 67 percent.


However, there are signs that the UK is falling out of love with special offers. Despite all the discounts, overall sales volumes are falling. For example, while the proportion of personal care items bought through a promotion rose two percent over the last year to 64 percent, total sales fell by 1.7 percent.

Part of the reason for this, no doubt, is rising prices at a time when consumers are strapped for cash. Overall food and non-food prices rose by 1.8 percent across Europe last year, but by even more in the UK - 2.9 percent, putting an extra £15 on the cost of the average monthly shopping bill.

But there are also signs that the British shopper is becoming more cynical about special offers - hardly surprising when they're so widespread.

Indeed, the Office of Fair Trading is currently investigating the plethora of 'half-price sales' by furniture retailers that generally seem to last all year round. And, last month, Tesco was fined £300,000 for selling strawberries at 'half-price' when they'd only been on sale at the higher price for a very short time, following a complaint from a disgruntled shopper.

Increasingly, customers are buying whichever product is on special offer that week, shifting to a different brand whenever store promotions change. As a result, manufacturers are becoming disillusioned.

"Promotions have helped shoppers meet the rising cost of their grocery shopping baskets, but they eventually become used to them," says Tim Eales, strategic insight director at IRI. "After a while their loyalty towards brands and stores erodes, which makes it difficult to raise prices in the future."

It's also become easier for customers to 'cherry-pick' low prices using comparison websites such as mySupermarket, which allow users to piece together their shopping basket from the cheapest combination of stores.

As a result, says IRI, retailers are likely to move away from offering quite so many discounts, and towards clearer, all-year-round pricing - saving shoppers some sometimes-complicated maths.

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