Introducing: a study of your basket

Grocery retail has always been a dynamic environment, but today’s combination of high inflation, price wars and fierce inter-retailer competition, heavy promotional activity, and increasingly cost sensitive consumers is intensifying pressures throughout the supply chain. While shoppers experience these dynamics at the shelf edge, suppliers feel them acutely upstream.

To get under the skin of this, we will regularly study a branded basket and analyse changes to explore different aspects of the variations in pricing and promotional behaviour and their impacts for operators.

This comparative analysis considers 31 branded SKUs across seven major UK retailers, featuring a diverse mix of iconic household brands, from Heinz and Lurpak to Warburtons, Fairy and Cadbury, spanning everyday staples such as dairy, bakery, snacks, beverages and cleaning essentials.

In this first exploration into what’s happening in your basket (based on a January 2026 snapshot), we look at how retail price ladders, discount depth, and promotional mix don’t just influence consumer behaviour, they amplify the bullwhip effect, creating exaggerated demand signals that manufacturers, co-packers, and logistics networks must somehow absorb.

Price variation as a structural driver of volatility

Base prices alone illustrate a fragmented retail landscape. In the sample, Asda offered the cheapest base-price basket at £83.99, while Waitrose sat at £94.45, a spread of more than £10 for the same branded products. Tesco and Morrisons clustered close to Asda, while Ocado and Sainsbury’s formed a mid tier above £89.50.

Such dispersion destabilises demand for suppliers. When price-sensitive customers shift retailer by retailer in search of value, suppliers face oscillating order volumes, even when underlying consumption remains flat.

Promotions: The largest source of demand distortion

Stable pricing generates steadier ordering rhythms; those with higher and more variable price points introduce unpredictability into upstream planning cycles. Promotions naturally create dramatic disruption.

Promotional mechanics and intensity vary. In this first data snapshot, Iceland had 58% of SKUs on promotion, with 18 out of 31 SKUs on promotion, compared to Sainsburys and Tesco which had which each had 32% of SKUs on promotion. Meanwhile, retailers differ substantially in the type of promotions they rely on. Iceland’s portfolio is 72% multibuy offers, whereas Sainsbury’s promo mix is 70% ‘save’ promotions, typically less distortionary.

For suppliers, these differences matter. Promotions, especially multibuys, inflate short-term demand well beyond true consumption. They not only introduce noise into forecasting systems, they force manufacturers into a cycle of firefighting: increasing safety stock, adjusting labour at short notice, expediting inbound materials, and running production lines harder and less efficiently.

The impact of multibuys

Generous multibuy promotions disproportionately drive the bullwhip effect because they create sudden, sharp uplifts. Average multibuy discounts for retailers averaged 23-37%, peaking at 37% for Sainsbury’s and the highest discount recorded at 50% for Morrisons. ‘Save’ promotions, by contrast, deliver gentler incentives, with average savings falling between 19-27%.

Deep multibuys often mean large, condensed orders to suppliers, designed to pull stock forward into the network. Accurate forecasts are not always shared, though ideally, they would be collaboratively developed. The result: suppliers must hold excess finished goods inventory ‘just in case’ the promotion overperforms, yet risk write-off if it underperforms. Flexing production in this way increases overtime costs, stresses equipment, and magnifies the environmental footprint of operations.

The paradox is clear in the basket comparison: Iceland’s promo loaded offer reduces the average customer basket from £91.25 to £71.83, delivering the highest savings in the sample, but such savings typically require suppliers to absorb higher costs-to-serve through elevated stockholding and large swings in throughput, increased labour scheduling complexity, and rapid logistics turnarounds.

A path forward: harmonising retail and supplier planning

Reducing the bullwhip effect requires tighter alignment between retailers and suppliers. Smarter promotional calendars, greater transparency around expected uplift, and collaborative S&OP processes can significantly reduce demand noise.

Ultimately, the industry must recognise that the cheapest basket for shoppers may be the most expensive to serve. Only by moderating volatility, and sharing data more proactively, can retailers and suppliers build the resilient, cost efficient supply chains the market now demands.

Products studied:

*indicates at least one retailer did not stock this exact pack type so a variation on flavour/type was used

**indicates at least one retailer did not stock this exact pack type so a variation on pack size/format was used

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