Price Promotion

UK Retail Price and Promotion Trends

IRI Macroview Big Question, Price and Promotions:

What impact is the reduction in promotions having on category performance and is support focused on the right categories?

Since June 2016 the decision of Brexit led to the falling value of the Pound and ever since suppliers have seen their costs increase and their margins squeezed. At the same time, due to the continued rise of the discounters, retailers are under immense pressure to keep their base prices low, and are also being encouraged to make their price and promotions more transparent for the shopper*.

With the additional pressures of range rationalisation suppliers are in a pretty tight-spot in how to manage the increased costs and meeting the needs of the retailers. One of the ways suppliers can clawback some of those costs, whilst helping retailers implement their changing promotional strategies, is to cut out the inefficient and least effective spend on promotions.

In fact we can now see there are 25% less items on offer in-store than there was in November 2012.

So it is more important now than ever to optimise price and promotional strategies and to understand:

  1. Which categories deserve the highest levels of support
  2. Are the changes being applied appropriately?
  3. What evidence is there of the effects of different strategies?
  4. What should retailers and suppliers do next to continue this journey?

When prioritising promotional choices, retailers should look for categories where the effects from the products promoted also result in a volume benefit for the category as a whole. Giving a win-win between supplier and retailers. In this white paper we introduce a concept called “CPU Groups” which stands for “Category Promotional Uplift Groups. Categories known to fit into a high CPU group are categories which are seen to drive both brand and category growth. Read the paper today to find out more.

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Price and Promotions infographic

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*Which? consumer super-complaint www.gov.uk/cma-cases/groceries-pricing-super-complaint