The Sales Promotions Surge: What this means for FMCG Brands

The Sales Promotions Surge: Why Smart FMCG Brands Are Doubling Down on Tactical Marketing New Fining Powers from Competition & Markets Authority

The latest IPA Bellwether Report reveals a striking trend that should have every FMCG marketing manager and agency director taking notice: 

Sales promotions budgets have hit their highest growth rate in two years, with a remarkable +9.4% net balance in Q2 2025. 

But here’s what makes this surge particularly significant – it’s happening against a backdrop of economic uncertainty and the biggest regulatory shake-up the industry has seen in decades. 

The Perfect Storm Creates Opportunity 

While overall marketing budgets stumbled in Q1 (the first decline in four years), the Q2 rebound has been driven almost entirely by tactical approaches. 

Key insight: Sales promotions and direct marketing are leading this charge, and the timing couldn’t be more strategic. 

The Numbers That Matter: 

• 36.9% of firms remain pessimistic about industry prospects 

• Nearly 20% are increasing promotional spend 

• +9.4% net balance for sales promotions (vs +8.0% in Q1) 

This isn’t contradictory – it’s smart strategy in action. 

Three Key Takeaways for Your 2025 Strategy 

1. The Compliance Advantage is Now a Competitive Moat 

The situation: LHFD regulations are in full force, DMCC enforcement is ramping up, and many brands are paralyzed by compliance complexity. 

The opportunity: While promotional budgets surge, competitors sit on the sidelines, uncertain about new regulations. 

💡 Your move: Brands with robust compliance frameworks can capture market share while competitors hesitate. Christmas 2025 represents a massive opportunity – there’s still time to launch compliant social and digital promotions, but the window is narrowing fast. 

2. Economic Pressure is Driving Promotional Innovation 

What the data shows: Companies are “recognising the need for more direct targeting of their audiences, prompting an increase in investment in digital channels.” 

What this really means: It’s not just about budget allocation – it’s about promotional sophistication. 

💡 Your move: FMCG brands succeeding now combine traditional promotional mechanics with advanced targeting and personalisation. Think: 

• Geo-targeted instant win games 

• Personalised cashback offers 

• Social-first competitions that drive engagement AND data capture 

3. The Short-term vs Long-term Balance Has Shifted 

Industry warning: Paul Bainsfair notes that while increased marketing spend is welcome, “the increase is largely driven by tactical approaches.” 

The challenge: Not choosing between brand building and activation – doing both simultaneously. 

💡 Your move: Christmas promotions need to work harder. Design campaigns that deliver immediate sales impact while building long-term brand equity. Consider promotional mechanics that create ongoing customer relationships, not just one-off transactions. 

⏰ The Christmas Opportunity Window 

The urgent reality: Christmas remains the biggest promotional opportunity of the year, and the regulatory landscape makes early planning essential. 

What the Bellwether data tells us:  

✅ Promotional budgets are available 
✅ Consumer confidence is slowly recovering 
✅ Competitors are still finding their feet with compliance requirements 

Christmas Planning Checklist: 

• Social media competitions: Need 6-8 weeks lead time for compliance review 

• Digital instant-win campaigns: Require technical setup and legal clearance 

• Cross-channel promotions: Need coordination across multiple regulatory frameworks 

Your Next Move 

The bottom line: The Bellwether Report shows promotional marketing is having its moment. 

• Economic pressures → demand for tactical solutions 

• Regulatory changes → competitive advantages for compliant brands 

• Christmas 2025 → fast approaching 

But success requires more than increased budgets. It demands expertise in navigating the new regulatory landscape while delivering innovative promotional experiences. 

🎯 Ready to turn these insights into action?