As of 1 November 2026, the semiannual Outlook Survey from Advantage Solutions, built on 138 responses from manufacturers and retailers collected between 7 August and 15 September, reports that neither side expects margin pressure to peak. Both groups are cutting cost and both expect the other to keep cutting. For a brand that sells through stores, the practical question is no longer whether the pressure eases, but which parts of store level execution it now reshapes.
What 138 buyers and sellers actually agree on
The finding is less dramatic than it sounds and more useful. Manufacturers and retailers rarely agree on where margin goes, because one sells space and the other sells product. What this survey shows is a shared expectation that efficiency work is now permanent rather than a phase, and that both sides intend to keep taking cost out of the same chain while asking the other to absorb part of it.
The recommendations attached to the study are the interesting part, because they describe a way out that does not depend on either side winning. Agree on shared measures of incremental sales, align pack sizes and offers with specific shopping trips, and expand technology investment around demonstrated outcomes rather than promised ones. Each of those moves the conversation from a percentage off an invoice to a number both parties can verify.
Why agreeing on the problem is not agreeing on the fix
A shared diagnosis still leaves the question of who pays. If a retailer wants a lower shelf price and a supplier wants to protect its margin, the only room left is in the cost of serving the trip, which is exactly where pack size and availability live. A case that is the wrong size for the trip creates waste at both ends: the retailer marks it down, the supplier funds the markdown, and neither records the cause as a pack problem.
Where margin pressure shows up at store level
The first place is the shelf itself. A brand that cannot keep its facings filled forces a substitution, and a substitution is a sale the brand paid to lose. Distribution coverage measured at the warehouse tells a buyer that the item was ordered; it does not tell anyone whether the item was there when the shopper arrived. In a year when both sides are cutting cost, the availability number is the one that quietly decides the next range review.
The second place is pack architecture. Smaller households and more frequent top-up trips reward smaller packs, while the cost per unit rewards larger ones, and the two pull in opposite directions. A supplier that only offers one size forces the retailer to choose between a price point it can promote and a margin it can defend. Offering both, with a clear role for each, is a cheaper answer than another round of discount.
| Pressure point | What buyers see | What suppliers should measure |
|---|---|---|
| Shelf availability | Substitutions and lost baskets | In stock rate by store and week |
| Pack architecture | One size that fits no trip | Sell through by pack and trip type |
| Price perception | Promotion depth that does not stick | Units moved per point of discount |
| Cost of serving | Efficiency asked of the supplier | Cost per case and per order |
The trip, not the category, is the unit
Category reviews usually start with a category number and end with a share target. Trips start somewhere else: a shopper needs dinner for four tonight, or a week of breakfasts, or a birthday. Two products in the same category can serve completely different trips, and a range that optimises the category average will under-serve both. Aligning pack sizes and offers to trips is the one recommendation in the study that a supplier can act on without waiting for the retailer to move first.
What to do before the next range review
Start with evidence the buyer cannot generate alone: store level availability for your own items, measured weekly, with the stores named. Add the substitution log, which shows what the shopper bought when your item was missing. Then bring a pack recommendation tied to a specific trip rather than a general request for more facings, and price the recommendation in units rather than in discount points.
The industry trend underneath all of this is that efficiency and assortment are now the same conversation. When both sides expect pressure to continue, the supplier that can prove it converts shelf space into shopper trips at a lower cost of serving keeps its space, and the one that can only offer a deeper discount is buying time. Consumer demand has not disappeared, but the tolerance for paying to serve it badly has.
FAQ
What does the survey actually measure?
It is a semiannual outlook survey of manufacturers and retailers, with 138 responses collected between 7 August and 15 September. The headline finding is that neither group expects margin pressure to have peaked, which makes efficiency work a standing condition rather than a temporary programme.
Why does store level availability decide shelf space?
Because a missing item produces a substitution, and the substitution is a sale the brand paid to lose. Warehouse level distribution coverage cannot show that, so a supplier that measures availability by store has evidence the buyer does not have.
How should pack sizes be decided?
By the trip each pack serves rather than by the category average. Smaller households and top-up trips reward smaller packs while cost per unit rewards larger ones, so a range needs both with a clear role for each.
What can a supplier do without waiting for the retailer?
Build its own availability and substitution evidence, tie pack recommendations to specific trips, and propose unit based outcomes instead of deeper discounts. None of that requires the retailer to move first.
