Promotions in crisis: Where next for FMCG marketers if deals no longer drive volume growth?

Tim Eales
IRI

Food and non-food price promotions don't always boost or sustain volumes in the way that they used to. Over the last year, the volume of fast moving consumer goods sold on promotion in Europe increased 2.7%, yet volume sales dipped by 0.1% (IRI Pricing and Promotion in Europe Survey, 2013).

Marketers across many sectors rely on promotions to provide a short-term boost to sales revenues. Shoppers relish using them to help meet the rising cost of their groceries – and as GDP across Europe has fallen in each of the last four quarters (with Germany bucking the trend) this is unlikely to change.

Over the last few lean years consumers have come to expect deals and are now adept at hunting out the best, happily switching brand and store to take advantage of them. This erodes brand loyalty and makes it difficult for manufacturers and retailers to raise prices to cover increasing costs.