Promotions are increasingly important

Extreme price sensitivity = more promotions

In the first part of her presentation, Tünde Turcsán highlighted that a significant proportion of Hungarian consumers spend the majority of their income – around 30% – on food and drug products, which is a high proportion by European standards. Approximately 50% of Hungarian households feel that they have financial problems, compared to 35% in Europe. In this context inflation is a particularly sensitive issue to households: the Hungarian market is special in the sense that price-sensitivity is extremely high, making promotions a key tool for broadening and retaining the consumer base. In 2023 promotions grew by 4.5 percentage points in Hungary – the highest figure in Europe.

Higher income – easier planning

Some of the most popular promotional activities include instant discounts, redeemable points and 1+1 promotions, as well as instant gifts. Household panel data reveals that Hungarian consumers react to promotions in many ways, depending on demographic, social and cultural factors. It is the under-40s who have showed the biggest increase in promotional purchases, 5.2%. Under-40s account for 26% of total FMCG spending, compared to the 32% of Generation X (41-55 year olds). People living in cities tend to respond better to campaigns than those living in smaller towns and villages. Interestingly, families who are otherwise better off tend to have a higher share of promotions. They can wait much longer, plan ahead more easily and can afford to buy larger quantities during promotions. But despite this, lower-income households have seen the biggest increase in the value share of sales in promotion, up 6.1% compared to last year. “Promotion is a very important communication tool, it does matter how we use it and what we communicate with it, as it has a short- and long-term impact on the brand”, concluded Tünde Turcsán. //