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The Post-COVID Promotional Landscape

The COVID pandemic has exerted a mixed impact on a number of pre-existing trends within grocery retailing. In some cases, this impact was one of deep acceleration, such as the growth of ecommerce in many markets around the world. In other cases, the pandemic reversed existing trends, an example being the steady growth of discount market share in many markets which went into reverse as people preferred to shop instead at larger stores.

In the case of promotions, COVID accelerated a trend which has seen promotional intensity decline since 2015. After many years of steady growth across the world, fueled by retailers who were hungry for commercial funding, by suppliers who were keen to grow market share, and by shoppers who were happy to exploit a bargain, 2015 saw a high point in terms of the share of groceries sold on promotion, with around a third of the volume of groceries in Europe being sold on deal. This reached over 50% in volume terms in the UK, or 40% in value terms.

It will be more important than ever to measure the effectiveness of promotions. Brands need to ensure that promotions are executed well instore while also remaining more choiceful: fewer, more impactful promotions will be more commercially beneficial than manifold lukewarm deals.

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