Running ahead of declining margins

The beginning of a new year and a short pause during the holiday season gave me the opportunity to take a closer look at several FMCG market statistics in Poland, with the aim of assessing the effectiveness of promotion management tools in relation to revenue. Naturally, this is a statistical approach, but it clearly demonstrates the real impact promotional activities have on profitability. For my analysis, I relied on selected user stories and the results generated by Visualfabriq following the successful implementation of the platform among clients in the UK and the United States.

In 2024, the value of the FMCG market in Poland increased by more than 8%, reaching PLN 244 billion. Nearly 43% of this amount was spent by consumers in discount stores, over 14% in local supermarkets, and around 8% in small-format chain stores, according to an analysis by YouGov Shopper Intelligence.

Promotional sales accounted for approximately 30% of total FMCG sales in 2024, while in 2025 a significant increase is expected – potentially up to 40% – driven primarily by rising retail prices. How are manufacturers responding to this trend? In order to keep pace with the growing “demand” for promotions, many are increasing promotional spending at the expense of margins, which are declining across multiple sectors such as dairy, meat, and beverages.

It is therefore worth taking a closer look at promotional margins in selected FMCG categories.

Conversations with manufacturers clearly indicate that the lower end of margin ranges is becoming increasingly common, and margins at or close to 0% are no longer unusual.

A few months ago, I wrote that “cash is king”, highlighting the risks associated with shrinking margins. One possible response is a strategy of running ahead – investing not only in new, more profitable products, but also in data-driven decision-making.

At this point, I would like to illustrate how promotional profitability evolves when a Trade Promotion Management (TPM) system is implemented systematically and correctly in companies with defined revenue levels.

The growing popularity and continuous development of such systems clearly shows how Western corporations are attempting to address declining margins and the increasing demands of retail chains.

As the examples demonstrate, it is worth …

Author: Tomek Majka , RGM Head of Sales at BPX