Brand owners forced to pay for retail price promotions

UK companies spend £14.4bn a year supporting retail price promotions, according to new data from the Institute of Sales Promotion (ISP).

The data, collated by ISP head of insight Colin Harper, shows branded goods manufacturers spent a total of £25.6bn in 2007/08 on all sales promotion activity through the retail channel.

This figure includes promotions not based on price, such as valueadded offers, experiential marketing, promotional merchandise and competitions.

Harper says price promotions are useful when deployed sparingly but have become the “drug of choice” for branded goods manufacturers and adds: “This is a tax brand owners have to pay if they want to continue to be allowed to sell their products through retailers.

Manufacturers believe these promotions benefit retailers more than manufacturers.”

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