In recent years, promotional tools have been used relentlessly by retailers in an attempt to maintain short-term growth in volumes. This tactic has now created a situation of promotional overload that appears to have benefited neither manufacturers’ own brands nor private labels.
As revealed by IRI figures, the promotional pressure that initially concentrated on the leading manufacturers’ brands has ended up benefiting follower brands, which have shown timid signs of growth.

However, reducing promotion is not sufficient to ensure growth of the private label. What is needed is effective space allocation, and in this respect the private label can certainly do better. According to IRI the percentage of shelf space occupied by the private label has actually fallen over the last two years.

To grow in today’s market it is vital to be aware of the limited effectiveness of promotional investments as they are envisaged today. In other words, a short-term tactical approach must be abandoned in favour of a strategic vision that sees the private label as a vital asset to promote the retail chain.