The $470M Opportunity: Changing The Game With Price And Promotions

 In NewZealand

New Zealand grocery shoppers are the most promotion-driven in the world. Almost six in every ten dollars spent on groceries in 2017 were sold on promotion – well ahead of other developed markets around the globe. The high level of products sold on promotion raises several questions; Why do we promote? What are manufacturers and retailers trying to achieve? Are most promotions genuinely driving incremental sales, or wiping value from categories and potentially eroding brand health? Can the sector sustain such high levels of price promotion?
Manufacturers and retailers are investing huge amounts of time and money executing these promotions on a weekly basis, so are they maximising their returns? The answer is emphatically ‘no’. Based on an analysis of 35 key categories, making up 60% or $8B of supermarket sales, it’s estimated that the retail sales value of the discounts applied to price promotions that generate little/no incremental sales is over $470M. In other words, there are products that would sell a similar amount whether they were promoted or not, yet we continue to erode value through excessive price discounting. Nielsen – Read more…

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