Deals bring benefits in convenience outlets but don’t shine in other retail
PROMOTIONS are good for convenience stores, but not so great for the rest of the retail industry, according to new research from IRI.
The market analyst conducted a study of over 85,000 promotions in the UK. It reckons they don’t boost sales growth as much as the industry might expect.
The report found that retailers are already moving away from deep discount multibuys (a fall of 40% over last year) towards clearer price cuts and ‘round pound’ deals. It also concluded that multibuys have had little or no impact on sales at a category level (0.02%), compared to price cuts that are delivering extra sales benefit to retailers (0.20%).
But c-stores see bigger benefits, with growth of over 2.5% in category turnover when promotions are used. Price cuts typically deliver 2.78% category value uplift while multibuys deliver 3.29%. Across retail, tissues, cheese, meal kits and frozen food promotions deliver the best revenue growth.
Thomas Hall, analytics programme director for IRI, said: “Many promotions and categories actually have a positive impact on revenue when they are executed in the right place at the right time, helping to grow a retailer’s business, and excite the shopper. The key is identifying promotions that genuinely drive sales and provide a win-win situation for retailer, manufacturer and shopper.”