Profit With Product Promotions


Promotions and sales at local grocery stores are drawing cash-strapped customers more than ever before.


According to a new study from The Nielsen Company, 42.8% of grocery purchases are sold on promotion, up from 40.8% a year ago. And grocery stores aren’t alone. Drug stores also are selling a significant portion of products on promotion, with 40.4% of sales linked to displays and/or features, Nielsen Business Media and Progressive Grocer reported.


The promotions include advertisements featuring products, in-store circulars, product displays on the end of aisle caps or away from their normal locations, and products with temporary price reductions.


“Although we shouldn’t be surprised by an increase in promoted sales during a recession, it’s stunning to see an additional 1.3 billion purchase decisions being influence by in-store promotions,” said Tom Pirovano, director, industry insights at Schaumburg, Ill.-based Nielsen.


The study also found that Chicago shoppers are the most influenced by promotions-with 55.9% of products in the city sold on promotion-followed by Phoenix, the island of Oahu and Indianapolis. Meanwhile, San Antonio, Oklahoma City/Tulsa and Birmingham have the lowest promotion sales. Impulse purchases such as ice cream, crackers and carbonated beverages sell the most on promotion. Promotions on magazines, ice and tobacco sell the least.


Nielsen also found that coupon activity, which has skyrocketed with the recession, was highest in disposable diapers (21% sold with a coupon), dough products (14%) and sanitary protection (12%).


According to the study, canned cat food, baby food and canned dog food are the best candidates for buy-one-get-one promotions, while coffee makers, baking powder and dishwasher rinse aids make the weakest categories for buy-one-get-one promotions.


“The key for consumer product manufacturers is to set goals for each trade promotion, and then measure the results to determine which promo events are the most efficient and effective,” Pirovano said. “Retailers who can drive their feature ads with the right mix of products, price points and display support will have success with both their vendors and shoppers.”







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