Do you really know if your promotions work?

Most US grocers are betting millions on promotions without a clear view of what actually works. Sharpening promotional measurement turns that spend into a controllable profit lever rather than an expensive habit.

The real cost of “flying blind”

Price promotions touch a huge share of grocery sales, with many markets seeing close to a third of all spending sold on deal. For a $2 billion grocer operating at 25% gross margin, with 20% of sales on promotion at a 25% average discount and 65% internal funding, this equates to roughly $87 million of margin investment each year.

With that level of spend, every one percent improvement is worth around $800,000 of additional gross profit. Yet many regional and independent chains lack the analytical horsepower to know which promotions earn their keep, so they just keep running what they have, hoping for the best.

Why promotions are hard to read

Most retailers run several overlapping mechanics at once, from item-level flyer deals to broad loyalty or day-of-week discounts that touch the entire basket. The interaction between these levers, seasonality and local competition makes it hard to see whether a specific offer truly grew the category or simply shifted volume in time or between items.

On top of that, a price cut on one product nearly always affects others in the same aisle through cannibalization and halo effects, which means looking only at that item’s uplift can be dangerously misleading. Effective promotion design needs clear objectives—incremental sales, traffic, penetration, inventory reduction—and a way to measure them at category and shopper level, not just at SKU level.

What good looks like

High-performing retailers treat promotions as experiments with a measurable hypothesis: who should respond, how much uplift is expected, and what success looks like in units, gross profit and new customers. After the event, they compare promo periods to clean baselines, accounting for price elasticity, seasonality and store mix, and they explicitly measure cannibalization and repeat behavior.

Those teams then use the results to tune depth, mechanics and media: dialing back offers that destroy margin, scaling the ones that truly grow the category and the store, and tightening supplier funding conversations around hard numbers rather than opinions. Over time, this creates a promotion playbook that is specific to their shoppers, banners and categories.

How 11Ants helps grocers do this

Working with leading grocers, 11Ants has built a promotion evaluation capability that turns raw POS and loyalty data into clear, answers for trading teams, category teams and marketers. Instead of weeks of ad hoc spreadsheet work, teams can see in minutes whether a promotion was incremental, where the growth came from and what it did to margin. Importantly it also informs on category impact and store spend impact, which is often the entire point of ‘loss leader’ type promotions.

Consider the promotion analysis report below for a 2liter cola promotion over Easter. It shows: 109 new shoppers into the category, 7 new shoppers into the store, units up over 300 percent and gross profit up more than 200 percent - clear evidence that this event pulled in genuinely incremental demand rather than just discounting existing purchases.

These kinds of insights let grocers quickly cut loss-making offers from the rotation and double down on proven winners, often paying back the cost of the platform many times over.

Conclusion

Promotions are too important to leave to gut feel: if you are investing tens of millions of dollars in discounts each year, you should know exactly which ones grow traffic, reengage lapsed shoppers, grow categories, profit and shopper loyalty and which ones quietly burn margin.

When you put hard numbers around every promotion, understand the customer behaviors driving those numbers, and leverage those ongoing learnings to inform future promotion investment, promotions stop being an expensive habit and become one of the most powerful profit levers in your business.