Banning multibuy discounts shown to drive sales rather than curb appetites
With the government under pressure to devise policies that help curb excessive consumption of unhealthy foods and drinks, new research from the University of East Anglia (UEA) finds that banning multibuy deals has the opposite effect.
In an article published today in the European Economic Review, Profs Farasat Bokhari and Paul Dobson examine the impact on alcohol sales in Scotland following the ban in 2011 on multibuy discounts such as "three for two" and "buy six, save 25%" deals. Their research found the ban increased rather than reduced sales, as retailers switched to using more straight money-off discounts, encouraging high-consumption households to increase their shopping frequency and buy more alcohol.
A proposal to ban multibuy deals on high-fat, -salt or -sugar (HFSS) foods and drinks was supposed to be implemented in England from October 2022, but the government delayed it for one year citing fears that removing such discounts would stoke inflation and raise costs for consumers.
The research from UEA's Norwich Business School and the School of Economics shows that when Scotland introduced such a ban on multibuy deals for alcohol, retailers switched to using more straight money-off discounts, which encouraged more frequent alcohol buying.
Profs Bokhari and Dobson said their findings suggest the UK government should re-think its intention to ban multibuy deals in England for HFSS foods and drinks due to come into force in October. Such a ban may backfire if retailers simply replace multibuy deals with other types of price promotions that encourage even more spending on unhealthy foods and drinks.
More information: Farasat A.S. Bokhari et al, Banning volume discounts to curb excessive consumption: A cautionary tale, European Economic Review (2023). DOI: 10.1016/j.euroecorev.2023.104480
Provided by University of East Anglia