- Baby Non-Food Products
- Baking/Cooking Staples
- Household Products
- Kitchen Products
- Paper Products
- Personal Care
- Pet Products
- RESEARCH & AWARDS
Retailers and manufacturers need to rethink their strategy if they are to compete in today's 'transforming economy,' a new report says.
American consumers' budgets are strained to the breaking point by escalating gas, energy and food prices. The result? They are re-evaluating what they buy and where they buy it, according to "IRI Times & Trends Special Report: Competing in a Transforming Economy," a study released in June by Chicago-based Information Resources Inc. (IRI).
"While analysts may disagree on whether or not the U.S. economy is in [a] recession, there is no question that the economy is in transformation," said Thom Blischok, president of IRI Consulting and Innovation. "U.S. consumers have been hit on all sides with record-breaking gas prices, dramatic increases in grocery prices, high unemployment and declining home values."
Escalating prices have bred exceptionally high price sensitivity, the study notes, driving down demand across multiple categories - while also spurring growth in private label, trial of lower-priced brands and accelerated channel migration. Moreover, long-standing purchase drivers such as convenience and health are losing some momentum in light of consumers' economic hardships.
Meanwhile, consumer purchases of basic ingredients and meal components also are up, the study says, while spending related to restaurants and non-essentials is down. But changes in consumer shopping and purchase behavior vary widely according to income, life stage and other factors.
- Leveraging best practice analysis and insight-driven action plans
- Gaining competitive advantage through early identification of emerging market shifts
- Building strategies that address distinct requirements by consumer segment, market and competitive threat
- Discovering strategic pricing and promotion opportunities
- Understanding new assortment, merchandising and distribution policies
IRI said it also is offering its new IRI Economic Key Indicator Tracking service, which provides an "instant view of emerging market conditions such as price and cost indices, category and private label demand shifts," and more.
To download the study, visit http://us.infores.com/page/news/times_and_trends.
Our Take: Today's transforming economy begs retailers to rethink "business as usual." Those retailers that make strategic changes designed to quell consumers' economic fears will be the winners during the months to come.
New analysis from The Nielsen Co. examines which consumer packaged goods best withstand a recession - and which are most vulnerable.
As consumers reprioritize their spending habits during this economic downturn, consumer packaged goods (CPG) manufacturers and retailers are being forced to re-evaluate their consumer marketing strategies, according to new analysis from The Nielsen Co., New York. The analysis, presented this month during Nielsen's Consumer 360 conference in Phoenix, examined which CPG categories were most recession-proof and which were the most recession-vulnerable.
The top five recession-proof categories, Nielsen said, are seafood, dry pasta, candy, beer and pasta sauces, while the five most recession-vulnerable categories are carbonated beverages, eggs, cups/plates, food prep/storage and tobacco. Nielsen analyzed macroeconomic variables, historical trends and consumer behavior to put together the lists.
"Consumers are feeling the squeeze as they are caught between rising costs and lower spending power," said Eugene Roytburg, managing director for The Nielsen Co. "As a result, many consumers are reprioritizing or altogether changing their spending habits. For CPG manufacturers and retailers, this requires a change in the way you market to consumers, and knowing which of your products are most affected by a recession will help you maintain focus on the right categories and brands in order to succeed."
Retailers and manufacturers have an opportunity to increase exposure for the most recession-proof categories, Roytburg said. As for the most recession-vulnerable categories, he said companies also have an opportunity here to target marketing efforts "to shore up performance and maintain traction during tough times."
Our Take: During a lousy economy, it's helpful for retailers to understand which CPG products consumers can and cannot do without. Moreover, private label provides a logical means to draw shoppers to a sale - particularly when it comes to recession-vulnerable items for which purchase/no purchase decisions are based largely on price.
Eye on Health
More retailers are educating consumers about nutrition-related choices.
A growing trend in the health and wellness arena is the addition of nutritionists and dietitians to retail grocery companies. More and more North American grocery retailers are relying on these folks to provide nutritional information, advice and even cooking tips to shoppers.
According to the May Competitive Edge newsletter from Barrington, Ill.-based Willard Bishop, manufacturers view health and wellness as going mainstream, and "are racing to develop new products with health and wellness in mind."
What's more, some retailers are going beyond the addition of nutrition experts and healthful products.
Skokie, Ill.-based Topco Associates is gearing up for the launch of its Overall Nutritional Quality Index (ONQI) this year, in partnership with Yale University - Griffin Hospital Prevention Research Center. Topco said ONQI will provide grocery retailers with a food scoring system - developed by a group of top nutrition scientists from throughout North America - that allows shoppers to make a quick comparison of foods on the basis of overall nutritional quality.
And Salisbury, N.C.-based Bloom - a Food Lion LLC subsidiary of the Delhaize Group, Brussels, Belgium - announced the official launch of the Guiding Stars Nutrition Navigation Program this month. Developed by an independent scientific advisory panel of experts, Guiding Stars uses a specific algorithm to label food items based on their nutritional content. The number of stars shown on a product's shelf tag - one, two or three - represents the nutritional value of the food item, the company said, with three stars indicating the most nutritious choice.
Scarborough, Maine-based Hannaford Bros., another Delhaize Group company, inaugurated the Guiding Stars program in 2006.
Our Take: Consumers long have complained about the difficulties they have distinguishing the most healthful items from the rest of the pack. Anything retailers can do to educate consumers here - in an easily understood manner - is sure to please health-minded shoppers across North America.
Bits and Pieces
Among the most notable retail and private label news:
- Publix Super Markets Inc., Lakeland, Fla., said it entered into an agreement to purchase 49 Florida stores from Albertson's LLC, Boise, Idaho. The transaction, expected to close in September, includes store locations throughout the state.
- In response to consumer economic concerns, ALDI Inc.'s U.S. headquarters issued a press release touting the fact that its select brands cost an average of 16 to 24 percent less than discounters or big box stores - and 40 percent less than traditional supermarkets' store brands. The company said it performed a competitive price study across all of its U.S. divisions, comparing the costs of a basket of 184 items deemed "very important to consumers."
- Retailers increasingly are relying on store brand offerings to attract economically strained consumers. According to a June 4 Chattanooga Times Free Press article, Publix recently launched a "Grocery Cart Comparison" promotion that demonstrates to customers how much money they can save by choosing the Publix brand. Similarly, Food Lion, a subsidiary of the Brussels, Belgium-based Delhaize Group, is offering a "Switch and Save" promotion focused on its store brand items, the paper said.