That environment continues to evolve. Consumers are still spending, but they are making harder choices. U.S. retail and food-service sales increased 0.8% in September – following a revised 1.3% gain in August. However, much of September’s growth reflected higher gasoline spending. Meanwhile, overall consumer prices rose 0.6% in September – and 3.7% year over year. Although grocery prices declined 0.1% for the month, core inflation remained persistent – rising 0.3% in September. For CPG brands, the challenge remains clear: consumers are spending, but pressure on household budgets is intensifying competition for every purchase as retailers continue to sharpen their value propositions to protect traffic and share.

CPG organizations must get more from investments already sitting inside the P&L. Promotion remains high on the list of commercial levers, and the challenge is ensuring those dollars drive profitable growth.

Averages can hide a lot.  A national event may look successful even though most incremental volume came from a small number of customers or incremental profit did not justify the investment. A high-volume SKU can look productive while absorbing too much trade support. A strong shipment period can mask pantry loading that shows up in the following weeks.

Teams must get closer to customer, SKU, and event-level performance to understand true incrementality from the brand side.

For example, a client’s recent earnings results provided a useful example of the tension. The company reported 3% organic sales growth in its fiscal third quarter. However, increased promotional investment contributed to a 1.2% decline in pricing. Adjusted gross margin also came under pressure, even as its Project Momentum productivity program continued generating savings.  

Critical questions: When every commercial dollar is under greater scrutiny, knowing where promotion truly pays back becomes essential. Sample questions include:

• Where are we paying to subsidize demand we were likely to get anyway?
• Which SKUs offer the greatest promotional ROI factoring in profitability, demand elasticity and substitutes?
• Which events are earning an acceptable return?
• Which customers or SKUs deserve a greater share of the investment?

But asking these questions is not enough, as retailers are continually raising the bar.

Buyers are under growing pressure to deliver value, improve shelf productivity, and protect economics. Simpactful Senior Partner, Bob Cinq-Mars, spent his career in retail management and notes, “Putting additional funding behind an event is rarely enough of a story for a buyer, particularly now. Vendors need to demonstrate how promotional investment can drive category growth, improve velocity, bring incremental shoppers or occasions into the category, and strengthen the economics of the shelf.”

So, what is the solution? Completing promotional analyses, storytelling through the lens of BOTH the brand and the retailer, and compelling narratives require better connection – and deeper, connected analytics across Sales, Revenue Growth Management, Category, Marketing, and Finance. Simpactful has identified several promotional analytics AI tools that enable this in a fraction of the time.

However, implementing AI tools is not enough. Simpactful Chief Client Officer, David Friedler reflects, “As we work with clients, we are seeing the greatest success where we combine AI with subject expertise and change management to address outdated decision workflows. AI is a powerful tool, but only if everyone shares a common understanding of internal and external success metrics – and processes are adapted to move at the required speed. We often see that by the time everyone agrees, the customer conversation or commercial window has closed, there is new data, or the requirements have changed.”

Small changes to the plan can add up to meaningful gains. “Promotion is here to stay, and profitability is a critical requirement on both internal and retail scorecards. Redesigning customer programs to work harder, evaluating promotional events against opportunity costs, incrementality reassessing distribution choices, and running SKU-level performance analytics. None of those opportunities are particularly glamorous, but across a large portfolio, they can add up quickly,” adds Simpactful Senior Partner, Stephanie Borselli, whose career spanned senior commercial roles with major food manufacturers.

For CPG teams focused on rebuilding volume while protecting margins, one of the greatest opportunities lies in maximizing the return on existing promotional investments.

Do you need help assessing the profitability of your promotional plans? Simpactful can help! Simpactful practitioners work alongside commercial teams and general managers to define the right questions, identify the right analytic tools, recommend optimizations, and support the sustainable implementation required to succeed. Our experts and analytic partners deliver the necessary experience across Revenue Growth Management, analytics and modeling, customer strategy, category management, and commercial execution to help teams find opportunities, align around the decisions that matter, and move into action quickly. Contact us today at contact@simpactful.com or 925-234-6394. Visit www.simpactful.com.