Promotions cannot save Easter sales

Stefan Padure, Vice President of the Angst cold meats producer, told Business Standard that there are two types of promotions, one of “desperation,” not based on any economic calculations, and one by careful producers, who anticipate future evolutions. However, the profit margin of producers is affected in both cases.

“The discount, in case it is a fair one, does not affect quality, only the producer’s margin. Gross margins in the food industry are below three percent,” Padure said.

According to the company official, a good promotion should be successful even after it ends, but Romanians “hunt” for promotions, and it is difficult to speak about loyal customers considering the many promotions in stores.

“So far, there are no major differences in terms of the number of promotions in 2009 compared to 2008,” said Andreea Mihai, Marketing Manager of Carrefour Romania, adding that the products which will sell best will include basic products (oil, flour, and eggs), cleaning products, chocolate, pound cakes, and wine.

Customers are expected to redirect themselves to less expensive products. “We also prepared promotions for this period because the consumer’s budget is clearly affected by the crisis. This is why I think consumers will redirect themselves toward the mainstream segment, to the detriment of the premium segment,” said Doron Zilberstein, Marketing Vice Chairman of URBB brewer.