RETAIL RESEARCH

Promotions are at a tipping point in South African FMCG retail

By our African Marketing Confederation News Team | 2026

Report finds the high intensity of retail promotions brings diminishing returns, margin pressure and narrows the scope for price-led growth.

After several years of inflationary pressure and intense competition, the South African consumer goods retail sector is approaching a tipping point: value remains essential, but retailers’ and manufacturers’ face limits on how much cost pressure they can absorb internally, how aggressively they can promote, and how far they can push prices.

This is according to the ‘2026 South African FMCG Retail Outlook’ report released by retail insights consultancy Trade Intelligence.

In 2025, real retail growth returned, particularly in food and everyday essentials, but it was hard-won, the report notes.

Households remained under pressure, juggling debt, utilities and food costs, while retailers and manufacturers competed intensely for share across formats and channels.

In this environment, price and promotions became central to retailers’ strategies, a rational response to constrained shopper budgets and heightened competition. Discounting helped protect volumes, loyalty programmes influenced trip decisions and ‘value’ became increasingly synonymous with visible price savings.

Photo: RDNE Stock project from Pexels

As the year progressed, it became clear that the reliance on promotions had become embedded in how the market operates, Trade Intelligence notes in a website post.

When value loses its sparkle

Consequently, promotions have become central to winning footfall and driving volume, resulting in a landscape where deals are expected rather than exceptional, and where promotional noise makes it harder for retailers and brands to stand out.

A key pitfall of sustained, high promotional activity across the market is that promotions do not automatically build loyalty.

“Shoppers are highly fluid, cherry-picking offers across retailers and brands, and they are often guided by loyalty apps and digital price comparisons,” explains Nicola Allen, Senior Analyst at Trade Intelligence.

“The abundance and constant nature of promotions have also led to the emergence of ‘promo-only shoppers’, who wait for their items to go on promotion before buying.”

At the same time, retailers and manufacturers face limits on how much cost pressure they can absorb internally, how aggressively they can promote, and how far prices can be pushed without undermining brand positioning or shopper trust. High promotional intensity brings diminishing returns, margin pressure and narrows the scope for further price-led growth.

Focus is therefore moving towards more personalised offers, based on how, where and what people buy. Loyalty programme data is central to this change, increasingly determining who gets which deals and when.

Some retailers are also placing greater emphasis on managing price perception through consistent everyday pricing and credible value cues, rather than relying on frequent or constant promotions.

“Behind these shifts sits a commercial reality: retailers and suppliers are trying to balance affordability for shoppers with sustainability,” states Trade Intelligence.

“And, for shoppers, the result is likely to be a value experience that feels less noisy, more personalised and, over time, more predictable – even as price sensitivity remains high.”