January is traditionally a time when people tighten their belts as they await the year’s first pay cheque, resulting in a greater demand for value options and price promotions. In a cost-of-living crisis however, this demand could be more of a long-term trend for 2025 as a whole.

Retailers have seen some custom­ers purchasing more value items, particularly in categories such as biscuits and tinned goods.

Catherine Johnson, from Premier St Dogmaels in Pembrokshire, says the quality of own-brand options has increased. “There’s a better middle range than there used to be,” she adds.

“Brands like Jack’s might have been seen as a value-led item 10 years ago, but it’s more of a middle ground now.”

Additionally, Shisan Patel, from Jash (DPS) in Birmingham, says the price differential between branded items like Heinz and own-label equivalents has also stretched from “30p a can to 60p”, which has boosted demand further.

Highlight value and price differences to increase pick up basket spend

Highlighting these price differ­entials on the shelf in a prominent way is a good way to help customers make purchasing decisions, but it can also inspire impulse purchases from customers impressed at the savings you’re offering.

“We have the Jack’s range and it’s doing really well,” says Qais Sarfraz, from Premier Supersave Mini Mar­ket in Burnley, Lancashire. “They introduce new lines, too. Recently, they introduced long-life milk as a price-marked pack (PMP) at £1.39. If you compare it with Nestlé, it’s nearly £1 cheaper.

“The customer feedback from that has been great. It’s very popular. People want bargains, and Jack’s is perfect for them.”

It’s also important to focus on the categories where value is being sought, whether that’s groceries, confectionery or biscuits. Make sure that you are hitting the right balance between giving customers a good deal and getting the margins you need on premium lines in other categories.

Adjust layout and displays to highlight value

Catherine Johnson, from Premier St Dogmaels in Pem­brokeshire, has noticed a shift in customer behaviour around value-led products, which has led to a change in how she lays them out in her store.

“About eight years ago, people were less embarrassed about buying the value-led items, so we could put them higher up the shelves,” she says. “Now the trend is to put them lower down, so custom­ers can get a quick price com­parison without drawing too much attention to themselves.

“It’s mostly in biscuits and cakes where people are look­ing to downsize costs, so we’ll have McVitie’s brands on one shelf and Euro Shopper op­tions on the shelf below.

“We’re highlighting the branded goods more. We don’t have a reduced section in the shop, but as we’re a Booker-branded store, we receive monthly PoS from Booker for any new offers, which is helpful.”

Boost rate of sale by focusing on the categories shoppers most want value

Retailers might see less money entering the till when custom­ers opt for value-led options. However, in many cases, they’ll see a better margin return from them than they would get from branded alternatives.

Qais Sarfraz, from Premier Supersave Mini Market in Burnley, Lancashire, gets a minimum of 30% margin from his Jack’s and Euro Shopper lines. For him, value sales are up in the grocery section – tinned food, long-life items and sauces – so this is where he focuses his value offers.

Like Johnson, he puts the branded and own-brand prod­ucts close together, but unlike her, he has changed his layout and now positions them on the same shelf so customers can get an even starker apprecia­tion of the price difference.

“We do quite a lot of reduced-to-clear stuff,” he adds. “We haven’t got a full section dedicated to it, but we have reduced labels for them.”

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When to offer the price-marked option

Umang Shah, from Tudor Library in South Croydon, largely stays away from own-brand products in his shop. That’s because his customers are generally loyal to brands within the cat­egories he principally stocks – soft drinks, confectionery and stationery.

“In the summer, we’ll keep 50p own-brand energy drinks out there because that’s when customers are really looking for value options, but otherwise I stick to brands,” he says. “But if there’s an op­tion for a PMP or a non-PMP, I go for the PMP every time, across all categories.”

Shah says 10% of his cus­tomers are actively looking for deals in his shop, so he will also include offers like ‘two for £1’ wherever pos­sible. He says that, aside from Cadbury, PMPs still provide him with the margin he needs most of the time.

“You get a proper margin on soft drinks like Monster and Red Bull,” he adds.

Use discounts to offer value and cut waste

Products that are reduced to clear not only provide retailers with an effective way to squeeze some profit out of something that was headed for the bin. They also give value-focused customers a reason to come back to a store again and again.

With apps such as Gander and Too Good To Go allowing retailers to better promote these kinds of offers, this is something that retail­ers should look into more thoroughly in 2025. Alex Kapadia, from Bargain Booze Dunstable in Bedfordshire, has already done so.

“After we introduced Gan­der, our sell-through rate on reduced products went from 45% to 70%,” he says.

“We’ve integrated with Snappy Shopper and it’s up to 85%. People can see they can get these reduced products delivered and they are then buying other products on top of the reduced items, which has been really helpful.”

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