The Trap You Are Already In
Here is the position worth arguing: brands and retailers that enter Q3 with an unreformed promotional calendar are not holding share. They are subsidising a consumer migration they cannot afford.
The evidence is concrete. BellRing Brands reported second-quarter sales volume growth of 10.8 percent alongside a 9 percent decline in price and mix. Sales money grew only 1.8 percent year-on-year. Operating profit fell 30.6 percent. That is what a sustained promotional environment looks like when it compounds: volume goes up, money goes down, and the profit line collapses. BellRing's CEO named the cause directly: heightened consumer price sensitivity and "a sustained promotional environment."
At the same time, Alvarez and Marsal survey data reported by Food Dive shows that 42 percent of U.S. grocery shoppers plan to switch to less expensive stores this spring, up from 31 percent last fall. Critically, over half of those moving to discount stores say they plan to buy the same brands they always have. They are not abandoning your brand. They are abandoning your channel. Deeper promotions at your current retail partner will not stop that migration. Only a confident, well-structured price position will.
Add rising input costs: Kraft Heinz CEO Steve Cahillane described lower-income consumers who are "literally running out of money at the end of the month", while PepsiCo CFO Steve Schmitt warned that the Iran conflict is likely to fuel another round of inflationary pressure. You are being squeezed from both ends. The consumer is stressed, your costs are rising, and your promotional calendar is the one variable you actually control.
A Q3 reset is not optional. But a bad reset is worse than no reset at all.
Step 1: Pre-Reset Analysis (Weeks 1 to 3)
Do not touch the promotional calendar until you have run three diagnostics.
Baseline erosion rate. Pull your everyday shelf price for the last 52 weeks at item and customer level. Compare it to your list price. The gap is your erosion. If your everyday price has drifted more than 8 to 10 percent below list without a deliberate strategy behind it, you have structural baseline damage, not a promotional frequency problem. Fixing frequency alone will not help.
Promoted versus non-promoted volume split. What share of your total volume sold on promotion in each of the last four quarters? If the promoted share is above 40 to 45 percent in grocery, you are in dependency territory. Shoppers have been trained to wait. Cutting depth without a plan to rebuild non-promoted purchase occasions will produce an immediate volume hole in weeks 4 to 8 of the reset window.
Shopper migration signal. Cross-reference your own loyalty or panel data against the broader channel shift. Food Dive reports that only 35 percent of consumers say they will turn to cheaper brands at their current grocer, down 14 percentage points from fall. The bigger threat is store switching, not brand switching. If your distribution at discount and value channels is thin, your pre-reset work must include a parallel distribution conversation, not just a pricing conversation.
One named metric to track before the reset window opens: promoted price gap versus nearest private label, measured at the shelf. Albertsons CEO Susan Morris has noted that the company is adjusting prices strategically while using productivity savings to protect returns. Retailers are doing their own math. You need to do yours first.
Step 2: The Reset Window (Weeks 4 to 10)
Take a clear position on this: reduce depth before you reduce frequency. This is the step most commercial teams get backward.
Cutting the number of promotional events first produces a large, visible volume drop that panics sales teams into reversing the reset within six weeks. Cutting depth first, by 15 to 20 percent per event, produces a smaller and more manageable volume signal while beginning to rebuild your baseline price. Hold that for six weeks, measure the baseline response, then make the frequency decision with actual data rather than projections.
Three rules for the reset window:
Hold your floor price. Set a minimum promoted price for each item before the window opens and do not go below it regardless of retailer pressure. The floor is not a negotiating position. It is a structural commitment. Every exception you grant in weeks 5 or 6 resets the baseline clock.
Redirect some of the trade spend into display and feature. Display and feature without deep price cuts still drives shopper attention but does not train price sensitivity the way a discount does. Kroger has leaned on fuel incentives and loyalty-based promotions rather than straight price cuts. The principle is the same: give the shopper a reason to engage without anchoring her to a lower price point.
Pick two or three SKUs to hold at full price throughout the reset window. These become your baseline signal. If non-promoted volume on those SKUs holds or grows during the reset, your brand has pricing power you can extend. If it collapses, you have a more serious penetration problem that price alone cannot fix.
Metric to watch weekly during the reset: baseline dollar sales per store per week on your held-price SKUs, compared to the four-week pre-reset average. You want to see that number stable or growing by week 6.
Step 3: Post-Reset Measurement (Weeks 11 to 16)
Most post-reset reviews focus on the wrong numbers. They look at total volume and total money, see a dip, and declare the reset a failure. The right question is: did your baseline recover, and at what rate?
Track four metrics in this window:
Baseline price recovery rate. Your everyday shelf price on reset SKUs versus list price. Is the gap closing? A well-executed reset should show the gap narrowing by 3 to 5 percentage points within six weeks of the reset window closing.
Non-promoted volume share. What percentage of sales are now occurring at full price? If it was 55 percent before the reset and is now 62 percent, the reset is working even if total volume is flat or slightly down.
Shopper repeat rate at full price. Panel or loyalty data showing whether shoppers who bought at full price during the reset window came back a second time without a promotion. A repeat rate above 50 percent on non-promoted purchases is a strong signal of durable baseline recovery.
Competitive promoted price gap. Your nearest branded competitor's promoted price minus yours. If you widened the gap during the reset, watch whether competitors follow or hold. The broader consumer environment, with fuel costs rising and shoppers under financial stress per BeverageDaily's reporting, means competitors face the same squeeze. Some will blink and cut deeper. Do not follow them.
The Objection Worth Answering
A sceptical commercial director will say: "We cannot afford a volume dip in Q3 when the consumer is already stretched and switching stores." That is a real concern. But consider the alternative. BellRing's experience shows what happens when you prioritise volume: operating profit falls 30.6 percent in a single quarter. You can absorb a controlled, planned volume dip of 3 to 6 percent over ten weeks. You cannot absorb a 30 percent operating profit collapse that compounds into next year's trade investment budget.
The reset is not a bet against the consumer. It is a bet that your brand has enough genuine value to hold purchase at a price closer to your list. If it does not, you need to know that now, in Q3, not in Q4 when your annual planning round is already closed.
What to Do Next Week
Pull your promoted volume share and baseline price gap for the last 52 weeks. If your promoted volume share is above 40 percent in any key account, flag it as a reset priority. Set your floor price per item before any Q3 promotional proposals go to the customer. Book the post-reset measurement cadence now, before the reset window opens, so your analytics team is not building the measurement framework after the fact. And make the depth-before-frequency decision explicitly, in writing, so your sales team is not reversing it under account pressure six weeks from now.
The reset only works if you commit to it before the quarter starts. That window is closing.