A new study from retail market intelligence company IRI has revealed interesting findings on the effectiveness of promotions in UK retail.
IRI conducted the research looking at over 85 thousand individual promotions within household, food, alcohol, healthcare, soft drinks and personal care categories in order to answer the question of 'Do promotions help retailers?'.
Key findings included industry estimates that promotions help the retailers to grow a category by around 5 per cent in revenue. Actually on average, a category will only grow by 0.13 per cent in revenue - as a result of an average promotion.
The multibuys that are being removed have historically had little or no impact on sales at a category level (0.02 per cent), compared to the price cuts that show some benefit to the retailers (0.20 per cent).
In Health and Beauty, the situation is worse, according to IRI's data. Both price cuts (-0.12 per cent) and multibuys (-0.34 per cent) shrink category value on average.
The biggest winners are convenience stores - seeing a growth over 2.5 per cent in category turnover when promotions are executed.
On average a manufacturer will grow their sales by around 10 per cent as a result of a promotion, due the steal from their competitors, according to the IRI study.
© 2016 European Supermarket Magazine – your source for the latest retail news. To subscribe to ESM: The European Supermarket Magazine, click here.
