During its “True Costs” campaign, the discounter Penny sold some products for almost twice the price – and lost less sales than expected. Scientists have analyzed customers’ purchasing behavior.
During Penny’s “true cost campaign,” the discounter’s sales figures did not fall as much as expected. This is the result of a study by the Nuremberg University of Technology and the University of Greifswald. For the study, the scientists surveyed 2,255 people about their purchasing behavior before and after the promotional week.
Promotion on nine products
At the end of July 2023, the discounter Penny charged prices described as “true” for nine selected products for one week – i.e. the amount that, according to the company, should actually be charged when all environmental damage caused by production is taken into account. As a result, products from cheese to Vienna sausages became up to 94 percent more expensive. Organic products received lower markups.
The chain, which is part of the Rewe Group, said it wanted to create more awareness of the environmental impact of food production. The company donated the additional income – supplemented by a corporate donation of 50,000 euros – to a project for climate protection and the preservation of family-run farms in the Alpine region. According to Penny, a total of more than 370,000 euros was raised.
Fundraising as a reason to buy?
The study authors also attribute the fact that sales figures did not fall as sharply as such high price premiums would have been expected to the accompanying scientific communication and the connection with the donation. 84 percent of customers who bought the products despite the price increase said the donation was a strong reason.
According to the study, overall sales of promotional products fell throughout Germany. Customers did not buy the products primarily because of the price: 85 percent said it was too high. In East Germany, the decline in sales figures was particularly severe, at up to 70 percent. Sales fell relatively the least in the west and south of Germany; in many places there were only declines of up to 50 percent. These regional differences could be attributed to various factors such as income or interest in sustainability, say the scientists.
Awareness of “true costs” appears to have increased
According to the study, 64 percent of those surveyed had heard about the penny campaign. This increased awareness of the cost of food for every second person. 46 percent said the campaign was just marketing and had no positive impact.
“After the campaign week, the estimates of the additional costs for the true costs increased,” said Tobias Gaugler from the Nuremberg Technical University. However, customers still do not differentiate between different products.