"Although inflation was falling, prices were still high, which forced retail chains to offer more frequent promotions to attract customers looking for bargains. Moreover, the price war between retail chains resulted in an increase in the number of promotions as a strategy to maintain and increase market share. I estimate that it could have contribute to an increase in the number of discounts by up to 4-5 percent. – says Krzysztof Łuczak, co-author of the analysis from the Blix Group.
In the first half of 2024, retail chains prepared 8.8% more more promotions in stores than in the same period last year.
"Taking into account previous results, it can be seen that in the first quarter of this year the increase in the number of discounts was only 1.5% year-on-year." – stated in the report.
"The increase in promotional activity in the second quarter of this year can be partially attributed to the elimination of zero VAT. In the face of the tax increase, retail chains had to intensify promotions to maintain favorable prices for consumers, and thus – a good image and customer loyalty," she said. in the report by Julita Pryzmont, co-author of the analysis from Hiper-Com Poland.
The largest decrease in the number of promotions yoy. electronics and household appliances stores recorded, i.e. by 31.7 percent. Further declines y/y. concerned DIY chains (home improvement stores – PAP) – by 29.5%, drugstores and pharmacies – by 13.3%, and the cash&carry channel – by 0.6%.
According to Łuczak, high prices of electronic products and household appliances, as well as a limited number of premieres of new devices may have resulted in a decline in demand and limited discounts on this type of goods. "The DIY format focused more on the promotion of its loyalty programs. However, in the near future I expect a return to communicating promotions in DIY, because in summer the interest in this product category is usually the highest. In turn, in the case of drugstores and pharmacies, the growing number of e-mails may have been important. pharmacies offering lower prices," he pointed out.
Most promotions in the first half of this year were in discount stores and convenience chains; in both categories the increases amounted to 24.2 percent. There were also more promotions in supermarkets and hypermarkets – by 12.7% respectively. and 3.6 percent
"The convenience channel has caught up with discount stores in terms of the number of promotions, which proves its growing importance on the market. Being more flexible and adapted to quick purchases, it has gained in popularity. This forced discount stores to increase the number of promotions. The price war affected both formats, forcing them to offering better and better promotional offers. This result may motivate discount stores to further increase the number of promotions in order not to lose their competitive advantage," says Julita Pryzmont.
"In the second half of this year, rising inflation in the country will likely force all segments to further increase the number of promotions to remain competitive and attract customers."
"Taking into account the current economic situation, it can be predicted that there will be more and more promotions. Rising prices in stores will force retail chains to intensify promotional activities to attract and retain customers. Shopping Sundays may become key days for promotions, and other factors such as Seasonality and changes in consumer preferences will have an additional impact on the final results," concluded Łuczak.
Experts from UCE Research, Hiper-Com Poland and the Blix Group analyzed nearly 7.2 thousand. commercial leaflets with promotions with a total number of nearly 144,000 pages published in the first half of 2023 and 2024. These publications included a total of over 1 million promotions. The 8 largest formats on the retail market were taken into account, i.e. all discount stores, hypermarkets, supermarkets, convenience and cash&carry chains. Additionally, drugstores and pharmacies, DIY chains and electronics and household appliances stores were checked.
