A turnaround in promotions – brands are returning, but only with a discount?

This article is available for reading in Trade magazin 2025/6-7.

Consumer reactions: from panic to consciousness

The crisis situations that began in the early 2020s – the COVID pandemic, the energy crisis, hyperinflation – have all shaped consumer behaviour. According to Retail Zoom data, this wasn’t just a temporary adjustment, but a structural shift in consumer decision-making. Four distinct phases have emerged in recent years: panic buying and hoarding were followed by top-up shopping and an increase in shopping frequency, then downshifting, and finally rationalisation became the dominant consumer strategy. “Selective awareness” among shoppers has become widespread. This means that shoppers don’t base their purchasing decisions solely on price, but also look out for promotions, consider product changes and shop in more places to get the most out of their diminishing budgets.

Store closures and shoppers on the move

Inflation hasn’t only shaken consumer wallets, but also the viability of stores. Since 2022 more than 2,000 stores have closed in Hungary, mostly small independent shops: from the 20,266 stores counted in 2022 only 18,238 remained by the end of 2024. Despite this fact FMCG sales haven’t declined, demand has simply shifted to closer, more accessible or cheaper stores. This wave of store closures has been accompanied by a restructuring of retail channels. The biggest winners were discounters and drugstores – the latter produced the biggest sales growth in 2024. While the share of private labels in multinational chains grew only from 32% to 34%, their share in domestic retail chains rose from 5% to 26% within five years, mainly because of the inflation and the price-sensitivity of consumers.

Competing promotions and cautious optimism

In 2024 price became more important than ever before, with shoppers focusing on promotions, special offers and value for money. According to Retail Zoom, the share of promotions in sales grew to 23.7%, representing a 5.8 percentage point increase from the previous year. This trend is even stronger among loyalty card holders, who are more conscious about switching brands and taking advantage of discounts. The number of products in promotion has surged: while in 2024 a chain promoted an average of 890 SKUs per month, this year the figure is already 1,450 products. For the first time in seven years promotions have proved to be more effective than private labels. Retail Zoom data on 2024 reveals there is also a significant shift at category level: among essential products pork, margarine and milk showed a sales decline over 50%, and bread, wine, eggs, butter and cheese sales also reduced. In contrast, the most dynamically growing segments included ready meals, sweets, fruit yogurts, chocolate, biscuits and long shelf life dairy products – a 20-40% sales growth was observed in these categories.