Retailers’ promotions: What role do they play in household food purchases by degree of deprivation?

The purpose of this paper is to analyse the overall effect of promotions on consumers’ food purchases in Scotland and to consider the implications of the findings for food and health policy.

This is achieved by analysing a representative scanner panel data set for the period 2006-2013. The methodology consists of exploring the impact of promotions on food expenditure and allocation within households’ food purchases, using expenditure regressions and estimations of the linear version the Almost Ideal Demand System.

The results indicate that whilst promotions have differentiated effects by category, they have similar results by SIMD. The effect of the promotions on the total expenditure is positive for all the quintiles. However, the effect of promotions on each food category is complex because of the cross-effects between categories. As regards the effect of prices, the results provide a picture that seems to indicate that typical economic measures such as specific taxes applied to substances which, e.g., encourage obesity, might have limited impact on the diet given the inelasticity of the demand to changes in prices.

A contribution of this paper has been to focus on the effect of promotions on all the food products consumed by Scottish households, instead of analysing promotional influences on a single or reduced number of products within a category.