Journal of Retailing<\/a><\/em>.<\/p>\nBeer drinkers, it seems, rarely leave the grocery store without purchasing a salty snack or two, so a discount on beer will result in a significant boost in snack sales, more than compensating for the beer discount.<\/p>\n
But that\u2019s not the only interesting finding. Sales on staple items (brand name, high frequency, commonly purchased items) such as milk, bread and soft drinks, often lure customers to different grocery stores in hopes of saving money. Many times people will apply that savings to the purchase of other items, leading to fuller baskets and bigger sales.<\/p>\n
\u201cThe truth is that grocery stores are very competitive and operate on low margins, vying for customers among many players,\u201d Pancras said.<\/p>\n
Consumers typically go to the store closest to home, usually in a three-mile radius. To attract more customers, grocers must incentivize them.<\/p>\n
\u201cMost people will travel farther if they think they will save a significant amount of money,\u201d he says. \u201cSometimes they will \u2018trip chain\u2019 grocery trips with toy stores or mall visits, which I am researching currently in a separate study with a colleague.\u201d<\/p>\n
Are Deep Discounts a Shopper\u2019s Delight?<\/strong><\/p>\nAlthough conventional wisdom has always been that deep discounts will generate additional store traffic, there was little formal evidence to support the idea. Pancras and colleagues Dinesh Gauri of the University of Arkansas, Brian Ratchford of the University of Texas at Dallas, and Debabrata Talukdar of SUNY-Buffalo set out to investigate.<\/p>\n
\n The availability of Big Data has changed what we know about grocery-purchase behavior. — Joseph Pancras<\/cite><\/p>\n<\/blockquote>\nThe data for their study, \u201cAn Empirical Analysis of the Impact of Promotional Discounts on Store Performance,\u201d came from 24 stores in a grocery-store chain in a mid-size metropolitan area in the Northeast. The market is dominated by two regional grocery chains, which account for more than 85 percent of the market share. The grocery chain that supplied the data has the largest share of the local market, has more stores in the area, and tends to have a favorable pricing image.<\/p>\n
The researchers collected in-depth data on overall customer traffic, sales per transaction, and profit margin for a total of almost 14,000 transactions over a period of 49 weeks. They also studied the impact of promotions, frequency of purchases, impulse buying, stockpiling, and the sale of store brands.<\/p>\n
\u201cThis is an important strategic question,\u201d Pancras says. \u201cEven 20 years ago, the data was limited to a few categories, which really restricted what retail scholars could discover. The availability of Big Data has changed what we know about grocery-purchase behavior.<\/p>\n
\u201cOur results validate the widespread use of price promotions, supported by feature advertising, that provides beneficial impact on store performance metrics,\u201d he adds.<\/p>\n
Which Discounts Motivate Shoppers to Buy?<\/strong><\/p>\nThrough their research, Pancras and his colleagues discovered that discounts on ice cream, soft drinks, bakery products, and snacks are all associated with increases in grocery store traffic, sales, and profit margins. Special promotions on meat create the largest customer draw, with produce, beer, and fresh seafood also attracting significantly more shoppers, the researchers found.<\/p>\n
Promotions for less frequently purchased categories such as soup, condiments, salad dressings, water, laundry products, and pasta do not seem to draw a sharp increase in customers, and discounts on these transactions can decrease a store\u2019s profit margin, they discovered.<\/p>\n
Stores also need to be wary of attracting large numbers of \u201ccherry pickers,\u201d the ultra-bargain hunters who will come in just to buy the sale items and leave. Serving a disproportionate number of them will damage the store\u2019s profits, he says.<\/p>\n
One way to combat that is to feature \u201cimpulse buys,\u201d usually a new or unexpected item, which the shopper will add to the cart. These tend to be more profitable for grocers, and increase the customer\u2019s purchase total.<\/p>\n
Among their other findings are that people will wait for rock-bottom prices on \u201cstorable items\u201d \u2013 often canned food \u2013 unless their inventory is depleted.<\/p>\n
Cutting the prices on store brands also appeared to be an ineffective strategy for grocery stores, he said. Instead, well-known national brands are better candidates for effective retail promotions, because these are typically premium priced and so the promotions are perceived to be more valuable.<\/p>\n
The Future of Grocery Shopping <\/strong><\/p>\n\u201cGrocery store traffic, revenue, and profits are all important retail metrics and will perhaps be even more so in the future,\u201d Pancras says.<\/p>\n
The introduction of Walmart Supercenters, which offer extremely low prices every day, and Amazon\u2019s foray into the grocery-delivery business as well as its recent acquisition of Whole Foods, are putting grocers under increased pressure, he notes.<\/p>\n
\u201cThis is a fascinating field. Ultimately the customer is winning, due to competition,\u201d he says. Grocers are grappling with the idea that busy families want good-quality food, reasonable prices, and a quick way to accomplish their shopping.<\/p>\n
Today, Walmart has started implementing \u201cpersonal shopping,\u201d something that was previously offered only by super luxury retailers, where a store employee selects your grocery items and delivers them to your car at a drive-through; in some areas, it even stocks up a locked refrigerator outside your home. It isn\u2019t far-fetched to consider that this will become even more seamless, and someday a robot will select your groceries for you, says Pancras: \u201cThe future of grocery shopping might be much different than what we\u2019re used to now.\u201d<\/p>\n
But in the meantime, he acknowledges that not all of his grocery store research is of a professional nature. He, like many people, does have a guilty habit that adds an expense to his<\/em> family grocery cart.<\/p>\n\u201cDesserts. Very rich desserts,\u201d he says. \u201cBut I try not to purchase them often, so when I do, I don\u2019t feel too<\/em> guilty about it!\u201d<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":"
But not all discounted items are equal, marketing researcher Joseph Pancras found, and some can even decrease a store\u2019s profit margin. <\/p>\n","protected":false},"author":121,"featured_media":130703,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_crdt_document":"","wds_primary_category":0,"wds_primary_series":0,"wds_primary_attribution":0,"footnotes":""},"categories":[2076,1862,2225],"tags":[],"magazine-issues":[],"coauthors":[2105],"class_list":["post-130650","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-research","category-busn","category-uconn-storrs"],"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"publishpress_future_action":{"enabled":false,"date":"2026-05-11 14:53:08","action":"change-status","newStatus":"draft","terms":[],"taxonomy":"category","extraData":[]},"publishpress_future_workflow_manual_trigger":{"enabledWorkflows":[]},"_links":{"self":[{"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/posts\/130650","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/users\/121"}],"replies":[{"embeddable":true,"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/comments?post=130650"}],"version-history":[{"count":5,"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/posts\/130650\/revisions"}],"predecessor-version":[{"id":130720,"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/posts\/130650\/revisions\/130720"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/media\/130703"}],"wp:attachment":[{"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/media?parent=130650"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/categories?post=130650"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/tags?post=130650"},{"taxonomy":"magazine-issue","embeddable":true,"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/magazine-issues?post=130650"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/today.uconn.edu\/wp-rest\/wp\/v2\/coauthors?post=130650"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}