Key Takeaways:
• North American promo products distributors grew Q1 ’26 promo sales by 1.8% year over year, a notable drop from the second half of ’25.
• The war in Iran and economic uncertainty – which has driven up energy and shipping costs, disrupted supply chains and compounded tariff concerns – weighed heavily on industrywide confidence.
• Top-performing distributors credited vertical diversification, investment in people and AI, and strong client relationships as key factors in continued sales growth.
Soaring inflation, cost increases fueled by the war in Iran and continued tariff uncertainty have all contributed to a rocky start to the year for promo distributors. That’s according to data from the latest ASI Research Distributor Quarterly Sales Survey, which shows declining confidence across the industry and sales up just 1.8% year over year for North American promo products distributors in the first quarter of 2026.
“After a strong Q3 and Q4 in 2025, Q1 was a rollercoaster for promo distributors,” says Nate Kuczma, ASI’s senior executive director of research. “Positive movement on the tariff front was quickly offset by the war with Iran and rapidly rising energy prices. Optimism runs deep across this industry, but I think what many in promo need right now is more stability.”
Owing to tariff uncertainty and a trade war the previous year, the first half of 2025 was challenging for the promo industry, with sales declining 3.6% and 3.2% year over year in Q1 and Q2, respectively. The second half of the year was much better, as promo sales rose 5% in Q3 and 5.1% in Q4.
However, that momentum did not carry into the first quarter of this year. Nearly 40% of distributors said the quarter went worse than expected, compared to 32% who said it was better than expected.
The industry’s 1.8% growth in Q1 is even more modest when considering the rise in inflation over the last few months. The Consumer Price Index increased by 3.3% in March, according to data from the Bureau of Labor Statistics, driven by the rising cost of energy and goods as a result of the war in Iran. This means that industry sales were relatively flat when measured against rising prices. Inflation also had a direct effect on distributors, with nearly three-fifths of firms saying that rising consumer prices had a negative impact on promo sales in Q1.
Larger distributors outperformed smaller ones, with distributors under $1 million in revenue experiencing sales decreases in the quarter. Distributors with between $1 million and $5 million in revenue had the best quarter among any size classification, with 4.7% growth.
The largest distributors in the industry – with over $5 million in annual revenue – who have historically grown the fastest experienced a relatively pedestrian quarter of 1.1% growth.
Counselor Top 40 distributor Geiger (asi/202900), for instance, saw strong sales and order activity in January before experiencing a slowdown in February and March.
“We got off to a really hot start this year … we had some pretty big orders come in,” says David Geiger, president of the firm and a member of Counselor’s Power 50 list of most influential people in promo. “I think where we started to see a little bit of a slowing was last month.”
In total, only 38% of distributors increased their sales this quarter, down slightly from Q1 2025 and a significant decline compared to the end of last year, when half of distributors reported sales growth.
Read this full feature, complete with trend charts and research data, on Counselor.
