Promotional balance and latest FMCG trends

Posted by Filipa Silverio on Jul 28, 2020

In recent weeks we have looked at brand winners and losers. This has shown that promotions, if not managed in a balanced way, can lead to losses which then need even more investment to recover.

The first two topics this week look at that promotional balance which will be critical during and after the current crisis. The third article continues our weekly update on FMCG trends around the world.

  1. Analysis of a range of papers on promotions shows that long term benefits are rare and that there are both upsides and downsides.Upsides include: volume on the promo period; more usage; gaining sales from competition immediately and pre-emptively; and to a lesser extent category switching.
  2. But there are many potential downsides: lower prices on ‘normal’ purchases; impact on other parts of the portfolio; consumers waiting for and taking advantage of lower prices; and going to another store.
  3. Whilst FMCG business levels have dropped back since lockdown, the trends by country vary significantly and many countries are still seeing continued growth.