Promotions On Trial

Are they worth the trouble?

Many retailers invest heavily in promotions. It's not unusual for a grocer to give away 5-10% of revenue through promotional discounts, and the economic slowdown of the past two years has seen this figure creep steadily upwards.

Retailers now find themselves in a difficult position - they suspect that promotions hurt the bottom line and generate a lot of extra work for the organization, but the need to preserve sales volume makes them wary of cutting back. So are promotions worth the trouble? This short note gives our perspective.