Fashion

The New Economics of Retail Promotions: Stretching Margin in a Flat Market

Growth is slow, and shoppers are far more price-sensitive. The answer is not more offers; it is better ones. Treat promotion planning like a trading job: link it to your range and price file, and make every display pound earn its keep. When planning and execution sit in the same tool, such as Retail Express pricing, media and in-store display stay aligned across web and store.

What has changed in the promotion mix

Retail media has moved from a side experiment to a core channel. Budgets are climbing, UK grocers are leaning in, and suppliers now expect clear, measurable plans across on-site, off-site and in-store. As The Grocer reports, Tesco believes retail media could overtake TV by the end of 2025, and WARC forecasts global spend above $150bn. That is why the bar for planning and reporting is higher now.

Build a promotion P&L everyone trusts

Start with unit economics and make the model visible to trading, finance and marketing. For each offer, map base price, expected uplift, cannibalisation, halo and media spend, then include any supplier funding and fulfilment costs. Ground rules should be simple and auditable.

  • Minimum margin by role, for example, tighter controls on KVIs.
  • A cap on total promotional exposure within the category.
  • Clear start and end dates, with stock cover checked before launch.

Treat the store like a media channel

The shop floor still converts when you plan and measure it like media. End caps, shippers and aisle fins should come from the same plan as your digital placements, so what you promise online is what shows up on the shelf. POPAI UK & Ireland distils practical, evidence-based advice on in-store communication that helps teams design displays shoppers can spot quickly and staff can execute without fuss.

Plan the whole path to purchase

Good planning links the audience, the message and the placement. Use first-party data to target by value and need. Then pick the simplest mechanic for the job: a straight price cut to signal value, a multibuy to build routine, or a bundle to encourage trade-up. Keep imagery, price points and copy consistent so shoppers recognise the offer instantly online and in store.

Fewer promotions, better promotions

Busy calendars hide weak performance. Prioritise fewer, stronger campaigns that you can fund properly and support with distinctive creative. UK coverage, including Kantar insights reported by The Guardian, shows how quickly a price fight can spiral, so keep the focus on contribution, not noise.

Measurement that proves incrementality

  • Net margin after media and funding, not just redemptions.
  • Attachment effects, stockouts and substitution.
  • Returns, service contacts and fulfilment delays that erode the gain.

Track what changed because of the promotion, not what would have happened anyway. Use test and control where practical and publish a short post-campaign sheet with the numbers that matter and a clear decision to repeat or retire.

Fund with suppliers without losing the story

Supplier funding can widen your reach, but the category still has to make sense on the shelf. Tie funded placements to clear objectives, such as growing penetration in a new segment or accelerating a hero SKU, agree shared success metrics, and run one shared calendar that shows digital and in store together.

Governance that protects trust

Promotions should be fair, clear and easy to explain. Before launch, double-check who is eligible, when it runs and whether there is enough stock. Keep the same rules online and in store. Write short, plain terms that shoppers can understand at a glance.

Finally

In a flat market, precision wins. Treat promotions as a system. Keep planning, media and store execution in step, and measure what matters. With clean data and connected tools, promotional planning becomes a steady lever for profitable growth.

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