Convenience stores are seeing the biggest benefits of in-store promotions, according to a new study conducted by IRI.
The UK-based study, which looked at the effectiveness of promotions, found that the convenience channel is bucking the trend of other retail sectors, including grocery, reporting growth of more than 2.5 per cent in category turnover when promotions are used.
Multibuys fail to capture sales
According to the study, multibuys are having little impact on sales. While retailers are already moving away from deep discount multibuys (a fall of 40 per cent over last year) , the data found they have had little or no impact on sales at a category level (0.02 per cent). This compares to price cuts that are delivering benefit to retailers of 0.20 per cent.
Thomas Hall, analytics programme director, IRI and author of the study, said: “We do know that promotions play a much bigger role in terms of driving footfall and increased basket size. There are also sizeable listing fees paid by manufacturers for promotions, display space and preferential listings, which help to offset some of the sales revenue losses. This always needs to be taken into account when looking at how promotions help retailers grow.”
Where promotions are driving growth
According to the study, at a category level, tissues, cheese, meal kits and frozen food promotions are the leading areas in the UK that deliver revenue growth for their respective categories within grocery retailers.
“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,” Mr Hall said.