Minimum Unit Pricing: Are you ready?

Minimum Unit Pricing: Are you ready?

Beginning this May 2018, the Scottish government will implement Minimum Unit Pricing (MUP) on all alcohol sales. This new legislation has implications on shopping behaviour for both manufacturers and retailers operating in Scotland and beyond. Do you know how it will impact your shoppers?

Trading up

Premium brands, particularly in spirits, are likely to benefit from the introduction of MUP as the price differential between them and cheaper brands will diminish. Shoppers may take this as an opportunity to “trade up” to more expensive brands. While the impact here will be felt most acutely by supermarkets’ own-label offerings, convenience and independent retailers will need to be aware that the cheaper spirits, beers and ciders, which are popular with many of their shoppers, may no longer be the product of choice once the price differential is negligible. Convenience, symbols and independent retailers will need to be focused on quickly identifying the right range and space in-store to optimise sales and profitability.

Extinct: Major price saving deals

The introduction of MUP in Scotland is also likely to signal the end of major price-saving deals in spirits, beer and cider, as the likes of two-for-one deals would mean the effective price paid for each unit of alcohol would fall below the threshold. As these promotions can be major footfall drivers, identifying the right price and promotional strategy to attract new shoppers and retain existing ones will be critical in protecting your sales and profitability.

Impact on shopping behaviour

MUP could well signal an increase in cross-border alcohol shopping among Scottish shoppers to England and Ireland, where prices would be cheaper, mirroring what many Britons already do with the annual Calais run. Getting closer to your shoppers has never been more important to understand the potential impact of MUP on their shopping behaviours and changing product and retailer preferences so you can ensure that you retain your existing shoppers, attract new ones and protect your sales.

MUP takes effect in May and will impact the way your shoppers spend. We can help you get closer to your shoppers and mitigate the impact of MUP to your sales.

Get in touch to find out how we can help you:

  • understand your shoppers’ behaviours now and how that will change post MUP
  • identify the right range and space in-store to optimise your sales and profitability
  • implement the right price and promo strategy to attract new shoppers and deliver category value