The impact of price promotions on sales of unhealthy food and drink products in British retail stores

Abstract

We study the health impact of food and beverage price promotion strategies—multi‐buy offers and price discounts, typically biased toward unhealthy product categories—in British consumer retail. We are the first to employ econometric models from the marketing literature to analyze the impact of price promotions with a focus on population health. Our dynamic, reduced form demand model incorporates endogenous inventory (stock piling), consumption rates imputed from repeat purchases and allows for unobserved household heterogeneity. We find that removing price discounts is more effective for reducing purchase volume compared to removing multi‐buy offers for 10 out of 12 food and drink groups, particularly those products for which price reduction is more common than multibuy. We find that price promotions induce consumption—and waste –through behavioral effects, associated with increased household inventory (stockpiling).

The impact of the cost of living crisis and food insecurity on food purchasing behaviours and food preparation practices in people living with obesity

“…In relation to food purchasing behaviours, Ditlevsen et al (2023) reported that households with low-incomes often engage in bulk purchasing to benefit from bulk-buy discounting, and Adams (2023) reported that women experiencing food insecurity made use of 'bargain bins' and coupons to maximize their purchasing power. However, in the UK, the food that is on promotion has recently been flagged for its tendency to be high in fat, sugar and salt (HFSS), which has been found to contribute to excess food intake (Watt et al, 2023). Households with low-incomes also report engaging in financial budgeting as this allows households to manage limited resources effectively (Douglas, 2023;Power et al, 2018).…”