A sharp increase in own-label deals has led to another uplift in total promotional activity, but growth has slowed dramatically. James Ball reports

Promotional activity has soared in the past year as suppliers and retailers battle to keep shoppers spending. Last month, activity hit an all-time high, promotions accounting for 32% of consumer supermarket spend [Nielsen].

But there are signs that deals could finally be reaching a plateau. This month, the number of promotions was up just 0.8% on April, compared with 6.5% last month.

Significantly, this total was propped up by a substantial increase in the number of own-label promotions, which has risen 22% since April to 935. Conversely, branded promotions, funded by manufacturers, fell slightly.

"With an almost identical total number of promotions month-on-month, there are perhaps signs branded manufacturers might have hit the limit of promotional activity they'd like to invest in," said Assosia MD Kay Staniland.

"The biggest change has been in the number of own-label promotions that are again being given an additional push by the retailers, despite the brands' fight to retain the featured space."

The sharpest fall in brand activity came from Cadbury, which had 40% fewer deals this month. But a post-Easter drop is typical for confectionery manufacturers and this has not knocked it off the top spot. Cadbury has also invested more heavily in activity year-on-year, with more than double the number of deals this May than last, and more than twice those of rival Nestlé.

There were four new entrants to the top 10 table this month. Walkers shot to third with a raft of promotions supporting the culmination of its Do Us a Flavour advertising campaign, while Dove and Hardys also shot up the rankings with new money-off deals. Wall's was the final new entrant, rising from 13th to 10th.

Yet although the number of promotions has remained relatively stable, average savings have risen significantly month-on-month. The overall average discount rose two percentage points to 33.9%, while eight of the top 10 brands upped their typical discount month-on-month.

New entrant Hardys saw the largest rise, with May's typical 45.3% saving a massive 10.4 percentage points steeper than April's.

And more promotions may follow, said Staniland. "We could be close to saturation point, but I'm not sure we are there yet," she said. "There are still potential featured space areas in store that are used for non-promotional lines. We could see stores trying to maximise this extra space to boost offers."