Small Retailers Report On Alcohol Pricing, Product Range And Promotion Under MUP
First published on 26 May 2020
- Alcohol
An evaluation of the impact of Minimum Unit Pricing on small retailers in Scotland found the price of alcoholic drink products previously sold below 50 pence per unit (ppu) has increased, and retailers felt that the sales of those products most affected by MUP had reduced. MUP also appears to have led to some changes in product range, with small retailers ceasing to stock products that had experienced the largest price increases, and some examples of new variants introduced at lower strength or in smaller container sizes.
The study led by the Institute for Social Marketing and Health at the University of Stirling aimed to assess changes in the price, product range and marketing of alcoholic drinks amongst small retailers, in response to the implementation of MUP in Scotland. The researchers drew on Electronic Point of Sale data on product pricing, availability and characteristics (but not sales volume) from 200 small retailers in Scotland; interviews with retailers and observations in 20 stores; a content analysis of UK-wide and Scottish-specific retail trade press; and five product case studies examining in detail the impact on key alcoholic drink brands.
Small retailers either increased the price of alcoholic drink products previously sold below 50ppu in line with MUP, or stopped selling them. The most frequent form of promotional activity used to attract customer attention by small retailers was price marking on packaging, and there was found to be a reduction in this activity after the implementation of MUP, particularly amongst the drinks most affected.
Retailer perception of the impact of MUP varied. Some felt that sales had declined, particularly amongst high-strength cider. However, some reported little change in sales overall, with several small retailers describing increased profit margins for some products making up for the lower volumes sold. There were very few descriptions of hostile customer reactions, and few descriptions of an increase in theft or local illicit trade.
Martine Stead, Deputy Director at the Institute for Social Marketing and Health, University of Stirling, said:
“Our interviews with small retailers found that they took compliance seriously and there were few instances of pricing below MUP when we visited stores after the policy was introduced. Retailers reported that they had reduced or stopped stocking some products which had seen particularly large increases in price after the implementation of MUP, such as larger bottles of strong ciders. Overall we observed the most change amongst the high-strength cider and perry categories, which had typically been priced below MUP.
“During the interviews, small retailers reported some changes in purchasing patterns, such as customers moving from higher to lower strength alcohol products, to products in smaller containers or to products perceived to offer better value now they were sold at similar prices.
“The small retailers themselves reported implementation of MUP to be generally straightforward, with little or no adverse effect on small businesses. Many felt they were better able to compete with prices in supermarkets following the implementation of MUP”.
Clare Beeston, Public Health Intelligence Principal at Public Health Scotland, said:
“Minimum Unit Pricing has the potential to improve Scotland’s relationship with alcohol and reduce the harm it causes, and these findings show an encouraging pattern of behaviour change emerging amongst small retailers and customers.
“Furthermore, these findings from the small retailer setting support evidence gathered earlier in the MUP Evaluation that compliance with MUP amongst retailers is high and that MUP has had the most effect on the products previously sold well below 50ppu”.
MUP evaluation – Small convenience store study