PL Buyer's eReport August 19, 2008

August 26, 2008
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Attitude Adjustment

Public attitudes toward various industries change from last year, but supermarkets are still on top.


Each year, The Harris Poll - conducted by Harris Interactive Inc. of Rochester, N.Y. - measures public attitudes for approximately 20 different industries, asking U.S. adults whether each industry is generally doing a good or bad job serving consumers. This year's survey found many big changes -- both up and down -- since last year. But supermarkets again came out on top as having the best overall rating among those surveyed.

Supermarkets continue to get better scores than any other industry, Harris Interactive noted. Fully 90 percent of all adults think supermarkets do a good job, while only 6 percent think they do a poor job, giving supermarkets a net positive score of 84 ("good job" minus "bad job").

The Harris Poll only can hypothesize as to why supermarkets have consistently performed well. But Humphrey Taylor, chairman of The Harris Poll, told eReport editors that supermarkets are a "touch-and-feel industry where you can touch and feel the entity you're dealing with in a way that you can't with other companies" such as tobacco and oil companies (which, with -43 and -32 scores, respectively, came in at the bottom of the list).

Adding to supermarkets' appeal over other industries is the fact they aren't perceived by consumers as "big" companies, Taylor noted.

"There is no question that people tend to like smaller entities [better] than bigger ones," he said. "And with local supermarkets, even if they're part of a big chain, they're still [seen as] as smaller and local. When people talk about their supermarket, they may not think of the whole chain, but instead just the store they are dealing with."

Additionally, the lack of bad press could have contributed to the positive supermarket score, Taylor said.

"In the general media, I can think of extremely little [bad press related to supermarkets]," he said, "whereas people lower on the list have had a lot of problems."

Packaged food companies, while not in the top spot like supermarkets, had a positive score of 46. Taylor again said that positive score could be attributed to the touch-and-feel aspect of products, but the score could also be higher if consumers were polled on individual products rather than over the entire packaged food industry.

Our Take: Harris Interactive said its review of why industries have gained or lost popularity shows at least three factors at work: personal experiences, other real world events and media coverage. These factors can work together to change public attitude quickly, and no industry is immune - not even supermarkets. Case in point: Since 1997, oil companies have fallen 56 points - from a 24-point positive rating to a -32 negative rating.

Economy Watch

Rocking and Rolling Shoppers

Consumers' shopping behaviors are changing with the shifting economy.


More than 30 percent of consumers are eating out less and eating at home more, says a new study released from Unilever, Englewood Cliffs, N.J. The study, "Winning Shoppers in Turbulent Times - A Unilever Trip Management Report," reveals how different demographic groups are changing their shopping habits as belts continue to tighten during these challenging economic times.

The report notes that although consumers are watching their budgets closely, they don't want to give up product quality. A majority of consumers said they will continue to search out trusted brands across the store, with most shoppers saying they would not switch to private label to save money.

Additionally, respondents said they want retailers and manufacturers to be creative in product packaging and sales approaches. Shopper preferences included larger pack sizes, smaller package sizes at lower price points, and modestly reduced package sizes at the same price point. The least preferred option for surveyed consumers was the introduction of slightly lower-quality items at the same price point.

"Consumers are clearly feeling the effects of a perfect storm of challenging economic events such as the mortgage crisis, stock market volatility and rising energy costs," said Lisa Klauser, vice president of Consumer and Customer Solutions, Unilever U.S. "They are reacting by taking a new approach to shopping, as our study found that quick trips to the grocery store are declining, and major stock-up trips that allow consumers to replenish their cupboards for a long period of time are on the upswing."

Our Take: Anybody find it interesting that a survey conducted by a national brand company would find that most shoppers would not make the jump to private label to save money?

Industry Insider

Lacking Vision

Manufacturers need the tools to help retail execution.


Research from the Aberdeen Group, Boston (a Harte-Hanks company), reveals that 65 percent of manufacturers currently use a combination of legacy trade promotion systems and home-grown trade marketing processes. These systems lack collaborative tools or customer analytics related to feature and functionality for using shopper insights to develop optimized trade promotions. Such collaborative data-sharing, planning and execution-related analytical tools enable visibility toward shelf-life promotion product display, shopper marketing insights and sales performance data in varied retail segments such as grocery, specialty or general merchandise.

"Best-in-Class companies have reformed their assumption-based traditional approach to trade promotion management by infusing more precision in the planned promotions through real-time data and targeted segmentation," said Nari Viswantathan, research director and co-author of the report. "These companies have improved their forecast accuracy and controlled trade spending by centralizing the enterprise usage of product, customer, and location data."

Overall, Aberdeen data indicate the trade promotion management (TPM) process landscape is fragmented. Trade promotion excellence is not about reducing the amount of spending, but primarily about improving its efficiency, the report states, and the biggest challenge facing the consumer packaged goods industry is getting senior leadership to shift its thinking and view TPM as a cross-functional marketing platform -- not a stand-alone sales tool.

Bits and Pieces

What's News in Private Label

Among the most notable retail and private label news:


  • Stew Leonard's fresh food stores, Norwalk, Conn., said it introduced three signature extra virgin olive oils made from olives grown on family-owned groves in Italy, Spain and the Mediterranean. The private label olive oils -- 100% Italian Extra Virgin Olive Oil, 100% Spanish Extra Virgin Olive Oil and 100% Mediterranean Extra Virgin Olive Oil -- range in price from $6.99 to $7.99. Stew Leonard's is a family-owned and operated store with four stores in Yonkers, N.Y., and Norwalk, Danbury, and Newington, Conn.
  • San Fernando, Calif.-based Vallarta Supermarkets Inc. acquired an 89,693-sq.-ft. corporate headquarters and distribution center at the strategic "Golden Triangle" of Sylmar, Calif., announced Delphi Business Properties Inc. Vallarta Supermarkets caters to the growing Hispanic population of California, and the chain recently expanded to the San Joaquin Valley.
  • The Tampa Tribune reported that Publix Supermarkets, Lakeland, Fla., started a program of deep discounts on certain staple items. The program started with milk, lowering the price by 19 percent per gallon, and will expand to other products, the newspaper said. The article said no timetable was set for the discount program, but it will last longer than Publix's traditional week-long sales. Additionally, Publix is putting more emphasis on buy-one-get-one-free promotions and its Advantage Buys discount program.

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