Key Takeaways:
• North American distributor sales rose 3.4% year over year in Q3.
• Distributors with over $5 million in annual revenue had the strongest quarter with 6.4% growth.
• Tariffs, inflation and the Iran war remain key concerns.
• Industry confidence increased to its highest level since the end of 2025.
Despite a weakening labor market, rising inflation and sky-high oil prices, consumers are still spending.
It’s a behavioral pattern known as “the lipstick effect,” which suggests that consumers prioritize small luxury items during times of economic uncertainty.
It shouldn’t come as a surprise, then, that the promotional products industry – one that, in many ways, is in the business of selling small (and some large) luxuries – is once again proving resilient.
The latest ASI Quarterly Sales Survey from ASI Research shows that North American distributor sales rose 3.4% in the third quarter compared to the same period last year, marking the industry’s fifth consecutive quarter of growth.
However, those gains were uneven. Large distributors (over $1 million to $5 million in annual revenue) and extra-large distributors (over $5 million) posted sales increases of 3.4% and 6.4%, respectively. Sales were flat for midsize distributors (over $250,000 to $1 million), while the smallest distributors ($250,000 or less) saw sales decline 1.8%.
The data comes as the Bureau of Labor Statistics released its Consumer Price Index report, which shows prices in the U.S. rose more than half a percent in September – the largest monthly increase in five months and 3.7% higher than the same time last year. As suppliers continue to pass along rising costs to ease their pricing pressures, some of the industry’s quarterly sales growth may reflect higher prices (end-buyers paying more for the same amount of goods) rather than increased order volume.
It’s not just the U.S. that’s feeling the impact of higher prices. Last week, the International Monetary Fund released its world economic outlook, which warned that the global economy could “soon test the limits of resilience.”
“The promo market in Q3 remained very much in a ‘wait and see’ mode,” says Nate Kucsma, ASI’s senior executive director of research. “While overall sales are up, there are still several areas weighing on the overall market such as the Iran war, tariffs and their effect on the U.S. economy. Q4 is often a make-or-break quarter for the industry – maybe more so this year.”
However, through all these external factors, promo distributors are chugging along.
Read the full article on ASI Central.
