Unhealthy food price promotions

What are price promotions?

Public Health England has defined price promotions as special offers giving a discount on the usual selling price, which are typically restricted to a specific range, product or pack format.¹ These usually take one of three forms:

1. temporary price reductions, in which a product’s everyday shelf price is reduced (e.g. ‘half price’)
2. volume-based price promotions or multi-buys, in which shoppers can purchase more items for a discount (e.g. ‘buy three for $2’ or ‘buy one get one free’), and
3. offering extra volume of product for free, in which the manufacturer creates a larger pack size and states that a proportion of the product is free (e.g. a pack label stating ‘50% extra free’).

Price promotions are a common feature of grocery shopping, with a large proportion of household foods purchased when discounted.¹² Price promotions encourage ‘impulse’ or ‘unplanned’ purchases.³

How common are price promotions?

About 40% of all products sold in Australian supermarkets are price promoted, making Australia “one of the most highly (price) promoted countries in the world”.⁴ Price promotions are commonly used worldwide, with around 30% of products sold on price promotion in other countries, such as the United States and the United Kingdom.⁴ In Australia, temporary price reductions have been found to be the most prevalent type of price promotion, and are more common on discretionary (unhealthy) foods compared to core (healthy) foods.⁵ Sugary drinks constitute around two thirds of all price-promoted beverages in any given week.⁶ Studies have also shown that discretionary foods have larger discounts (26%) compared to core foods (15%).⁵ Price promotions are particularly prominent in checkouts and end-of-aisle displays within major Australian supermarket chains. A 2020 study found that, at checkouts, price promoted food and drinks were 7.5 times more likely to be unhealthy than healthy.⁷

The Australian experience reflects international evidence on price promotions. Other studies in Great Britain (2017) and Scotland (2020) have found that around a third of all food and drink items sold are price promoted, and that these items are primarily unhealthy foods.⁸⁹ Two 2020 systematic reviews of studies conducted in high-income countries confirmed that price promotions were more common on unhealthy food and beverages, compared to healthier options.¹⁰¹¹

What is the impact of price promotions?

Evidence suggests that price promotions lead to substantial short- and long-term increases in purchases of promoted products, particularly for unhealthy food products, like sugar-sweetened beverages.^{10 12 13 14} In the UK, an analysis of household purchases by 30,000 shoppers between 2013 and 2015 revealed that high-sugar food and drink items were more likely to be purchased on price promotion than other food and drink items.¹ In this study, the presence of price promotions led people to buy more within a product category, rather than simply buying the ‘usual’ amount at a cheaper price. On average, about 18% of the food and drinks purchased on promotion is additional to expected purchasing levels.² A report from the Australian Bureau of Statistic showed that consumers are particularly responsive to price discounts on confectionery/dessert items such as chocolate and ice cream.¹⁵ For every 1% increase in the price of the ‘confectionery and sugar’ category there is a 7.91% reduction in demand.¹⁵ Evidence overall suggests that price promotions lead people to buy more unhealthy food than they usually would, and that price promotions do not save consumers money.¹²¹⁵ Importantly, households with children have been found to be more responsive to price promotions than households without children.¹⁶

Purchases of price promoted products have been shown to result in stockpiling and increased overall consumption of those products,¹⁶¹⁷¹⁸ particularly among regular customers of the promoted products.¹⁹²⁰ Evidence shows that both temporary price reductions and multi‐buy promotions encourage additional purchases and greater purchase volumes.²⁰ For example, a study conducted in Scotland showed that volume promotions or multi-buys increase the energy (kJ) purchased from biscuits by 73% and savoury snacks by 78%.¹⁶ Collectively, the evidence suggests that price promotions for unhealthy products are likely to contribute to unhealthy population diets and/or increased food waste as a result of stockpiling.²⁰

Price promotions also have the potential to undermine the effectiveness of other pricing strategies designed to improve population health, including taxes on sugar-sweetened beverages (SSBs).²¹²² For example, in California, there was an increase in the amount by which SSBs were price promoted following the introduction of the Oakland SSB tax.²¹ Despite the critical influence of food and beverage prices on purchasing behaviours, price promotions remain a largely untapped policy target for improving population diets.^{23 24}

UK legislation on unhealthy food price promotions

In its 2018 childhood obesity plan, the UK Government committed to a legislative ban on volume-based price promotions, such as multi-buys and unlimited refills of unhealthy food and drinks (HFSS), as part of a broader reform package to address childhood obesity.²⁵ This ban on volume-based price promotions was enacted into law by the UK Government in 2021 alongside a ban on the placement of the same products in prominent locations in store and online (e.g. store entrances, end-of-aisles, checkouts, designated queuing areas or online homepages or checkout pages). In October 2022, the location restrictions came into force.²⁶ However, implementation of the volume-based price promotion restrictions has been delayed until 2025, due to stated concerns about the “unprecedented global economic situation”.²⁷²⁸

The Scottish Government also announced a plan to restrict multi-buys and unlimited refills of unhealthy food and drinks and explored whether to include temporary price reductions, extra free and meal deals in the scope of restrictions, as detailed in its October 2018 and July 2022 consultations on Reducing Health Harms of Foods High in Fat, Sugar or Salts ²⁹ and Restricting promotions of food and drink high in fat, sugar or salt.³⁰ However, an official policy is yet to be developed. Similarly, the Welsh Government proposed new legislation, due to come into force in 2025, intending to restrict multi-buys, temporary price promotions and meal deals of unhealthy food and drinks.³¹

Regulating price promotions in Australia

There is currently no specific regulation of unhealthy food price promotions in Australia.

A modelling study in Australia estimated that a policy that restricts price promotions on sugary drinks could lead to reductions in the population level of obesity and is likely to be highly cost-effective,³² although its impact would depend on how industry and shoppers respond to such a policy. The importance of industry and consumer response was shown by an analysis of the 2011 ban on alcohol ‘multi-buys’ in Scotland. After the implementation of the policy to ban ‘multi-buys’, there was an increase in temporary price discounts on alcohol, which resulted in no overall change on the volume of alcohol purchased.³³ This highlights the importance of considering the impact of a range of pricing strategies, and taking into account all price promotion types, as part of efforts to make health promoting changes in this area.

A 2022 study aimed to understand how potential government policies targeting food and beverage price promotions in supermarkets are perceived by food industry stakeholders in Australia.³⁴ Retailers reported concerns about losing their competitive advantage, and the possibility of an increased financial cost to consumers if a policy restricting unhealthy food and beverage price promotions were to come into effect in Australia. Retailers stated that mandatory regulation, extensive compliance monitoring, and financial support to promote healthy products (e.g. subsidising promotions of healthy foods from smaller suppliers) would aid effective policy implementation.

Mandatory government regulation is likely to be most effective in reducing the prevalence of price promotions on unhealthy products and establishing a ‘level playing field’ for all retailers, as highlighted by the UNICEF Guidance Framework to Support Healthier Food Retail Environments.³⁵ Regulations to restrict price promotions on unhealthy food and drinks are supported by two national frameworks in Australia, as part of a comprehensive set of measures to improve diets and prevent obesity. The National Preventive Health Strategy 2021–2030³⁶ identifies the need for interventions in food retail settings to reduce the promotion of unhealthy food and drinks, and the National Obesity Strategy 2022–2032³⁷ highlights the restriction of temporary price reductions and promotions as an example action to reduce exposure to unhealthy food marketing.

Ongoing monitoring and benchmarking of food retail environments, including the frequency and magnitude of price promotions, plays a critical role in informing policy responses.³⁵ Monitoring of the way in which price promotions support (or undermine) other policy measures, such as levies on sugary drinks and/or restrictions on advertising of unhealthy products, will also be important.

Content for this page was written by Clara Gomez Donoso, Deakin University and reviewed by Kathryn Backholer and Gary Sacks, Co-Directors at the Global Centre for Preventive Health and Nutrition at Deakin University. For more information about the approach to content on the site please see About | Obesity Evidence Hub.