Sir: The extraordinary increase in deal volumes in May, “up 28% on last year”, indicates that the battle for market share among the major mults, combined with increasing penetration from the discount chains, shows no sign of letting up in 2013 (‘Deal volumes flat in May but are still up 28% on last year,’ The Grocer, 8 June). While the depth of deal and number of bogofs are on a downward trend, this in no way compensates for the dramatic increase in promotion activity.
The implications for branded suppliers are clear failure to get a thorough and in-depth understanding of their promotional strategy and true net SKU profitability will lead to declining return on investment. Our research indicates that far too many mid-sized companies pay lipservice to robust evaluation of their promotion investment, citing ‘time’ and ‘resource’ as reasons. What is clear is that those companies that have embarked on a reappraisal of their trade promotion investment, often involving implementing trade promotion management systems, are those that truly understand the impact of their promotions and how best to maximise return on investment on their promotion activity.
Andrew Mallinson, director, Intelliprice