The off-premise channel is under pressure. Households are counting the cents, fuel prices are uncertain and discretionary spending is under the microscope for many.
So, the industry is responding the way it always does: by cutting prices. Promotional activity is up, shelf tickets are multiplying, and the word "value" is shouted louder than ever. The logic feels sound enough. Give shoppers relief, maintain volume and slug it out even as profits evaporate.
The problem is that the shopper data doesn't support the strategy so well.
The latest Shopper Intelligence data, covering more than 20,000 shoppers, reveals a channel that is deploying its biggest commercial lever with surprisingly little precision. Overall satisfaction sits at 73% and rising. Price satisfaction is at 74%. On the surface, the promotional strategy appears to be working but dig into the occupational and life-stage segments beneath that headline and a more uncomfortable picture emerges.
You see, higher managerial and senior professional shoppers record overall satisfaction of 78% — the highest of any shopper segment. Execution satisfaction hits 79%, as does price satisfaction, despite the fact that price sits lower within their priority set than it does for other shoppers. They’re not indifferent to price, but other factors matter to them just as much, if not more.
The channel is delivering its best experience to a segment that wasn't primarily shopping on price to begin with. The question for every retailer and supplier, therefore, is whether the discounting this group is benefiting from is winning their loyalty or just giving away margin on purchases that may well have been made at full price.
Now, that’s one end of the spectrum. What about younger shoppers?
Well, this is really worth taking note of, not because serving 18-to-24-year-olds should necessarily be the commercial priority but because the gaps are so pronounced they expose a structural issue.
Overall satisfaction for this cohort is just 57%, against a channel average of 73%. The instinct would be to assume the gap is coming from price, since 18-to-24-year-olds are likely to be the most price-driven segment in the channel. Wrong! Price is not where they’re most dissatisfied, nor is it the thing they attach the most importance to. In fact, product attributes like healthy choices, authenticity and pack options are comfortably more important to young professionals and yet deemed to be delivered significantly worse than for any other group of shoppers.
So, for this group, it's a double whammy: low satisfaction overall and the biggest gaps are coming from what they care about most.
On the one hand, you could say this is all a bit concerning, but at the same time, it’s a huge opportunity. What it indicates is that more cuts and thinner margins are not the answer. What we hear from shoppers is an ongoing call for better ranges, cleaner execution and smarter shelves where the hero is the product as much as it is the price. Pinpointing which categories to target and where to land your messages for maximum impact is the next job to be done. By funneling some of that promotional spend into those product and execution elements, the channel might start to see a different outcome.
Shopper Intelligence is a Platinum Partner of the Drinks Association.