Free Webinar

Margin Under Pressure: What Tariffs Mean for Pricing and RGM Strategy

20250528 Webinar Margin Under Pressure (4)

When costs spike and the outlook changes weekly, pricing decisions get riskier. This session breaks down the practical RGM moves that protect margin without overcorrecting on volume, share, or retailer relationships.

What tariffs, volatility, and uncertainty mean for pricing and RGM

Tariffs have reintroduced a level of unpredictability that most commercial teams have not faced in decades. Cost shocks now arrive suddenly, change frequently, and affect raw materials, packaging, and finished goods at the same time. For pricing and RGM teams, the challenge is not just higher costs, but the lack of clarity around how long those costs will persist. [05:58]

This session focuses on how CPG companies can respond when margins are under pressure but long-term decisions must still protect volume, share, and retailer relationships. Rather than presenting a single answer, the discussion explores how different RGM levers behave under uncertainty and how simulation can support faster, more confident decisions. [22:01]

What You'll Learn

Why tariffs create a different challenge than inflation alone.
Unlike gradual inflation, tariffs introduce sudden and often reversible shocks, making timing and flexibility more important than perfect long-term optimisation. [24:34]
How companies typically respond when margins are hit first.
Price increases and promotion optimisation emerge as the most common short-term levers, while reformulation and PPA play a longer-term role. [26:58]
When direct price increases work and when they destroy value.
The session explains how elasticity, shopper switching, and promo intensity determine whether price moves stabilise margins or accelerate volume loss. [13:29]
How PPA can absorb cost pressure more effectively than pricing alone.
Downsizing and pack changes can stabilise unit economics while limiting profit erosion compared to flat price increases. [36:52]
Why retailer collaboration becomes more viable under systemic shocks.
Tariffs affect entire categories, creating opportunities for shared responses rather than purely adversarial negotiations. [43:46]
How simulation helps teams act faster without overreacting.
Rather than guessing, teams can test scenarios and be ready to act when conditions stabilise or change again. [42:21]

Meet the Speakers

Ivan Tretyakov

Director Product Innovation at Buynomics

Ivan brings over a decade of experience in RGM. Before joining Buynomics, he led RGM and commercial strategy at Danone, where he enhanced decision-making speed and expanded portfolio coverage. Ivan holds an MBA from IE Business School.

Doug Hampshire

Head of Customer Value at Buynomics

Doug leads Customer Value at Buynomics, supporting clients in using AI-driven decision tools to improve RGM performance. Prior to Buynomics, he worked across multiple roles at Deloitte, including strategy and operations leadership and management consulting, delivering projects across public sector, retail, and supply chain domains. He has worked internationally across the UK, India, and Africa.

Session Highlights

Tariffs primarily hurt margins through unpredictability, not just cost size.
The inability to forecast duration makes long-term commitments riskier than the headline percentage increase. [05:48]

Price increases are the fastest lever but rarely the most efficient.
A flat 25 percent price increase reduced profit significantly due to volume losses, even before competitive responses were considered. [31:53]

Optimised price responses outperform blanket increases.
Using scenario optimisation, differentiated price moves across the portfolio reduced profit decline compared to uniform pricing actions. [34:18]

PPA changes can materially stabilise margins.
Switching from a six-pack to a four-pack offset cost increases and limited profit decline more effectively than price alone. [36:39]

Promotion changes require contract and country awareness.
In markets where promotions are tied to annual rebates, reducing discount depth does not automatically return value to manufacturers. [18:13]

Elasticities tend to soften when all prices rise together.
When entire categories face cost shocks, shoppers become less price sensitive, especially for essential goods. [37:56]

Q&A

How do tariffs affect price sensitivity in the US market?
When prices rise across the board, elasticities often soften, particularly for commoditised categories. Luxury and discretionary products tend to see stronger demand pullback. [37:59]

How should companies balance short-term tariffs with long-term pricing strategy?
The speakers recommend avoiding irreversible price moves when possible, preparing scenarios in advance, and acting quickly only when conditions stabilise. [40:19]

Do tariffs change retailer negotiations?
Yes. Because many suppliers face the same pressure, retailers are often more open to collaborative solutions that protect traffic and category health. [43:52]

What if a company depends on a single imported input?
In the short term, pricing and retailer negotiation are often the only options. Long term, lack of diversification significantly increases risk exposure. [46:19]

Is there one best RGM lever for tariff mitigation?
No. Effective responses combine short-term levers like pricing and promotions with longer-term PPA changes, supported by strong analytics. [22:27]