LAS VEGAS — As the recession prompts consumers to change their shopping habits, retailers must be ready with new ways to attract and hold their customer base, according to data presented here by Unilever last month.
The presentation was a year-end follow-up to a study conducted in mid-2008 to indicate the impact the recession is having on shopper behavior. The new information — the subject of a workshop session at the National Grocers Association's annual convention — was delivered by Mike Twitty, shopper insights group manager for Unilever, Englewood Cliffs, N.J.
According to Twitty, retailers need to understand the types of sacrifices their customers are making “and find ways to help them cope and to feel better.”
Retailers also need to understand how shoppers view categories that are most important to them so they can craft new retail strategies, he added.
“Now that virtually all shoppers have changed the way they live and shop, the major paradigm shift for CPG shopping is that value has become more important than convenience,” Twitty explained.
“In addition, differences between the ways categories are shopped are more pronounced than differences between economic groups — and as more shoppers visit value-oriented retailers to stretch their dollars, wealthier shoppers are leading the shift.”
Among the new data's findings, according to Twitty:
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While channel shifting is significant, the advantages are not. “While supercenters, clubs, drug and dollar stores are seeing more trips, only supercenters are seeing some net gain in unit sales,” he pointed out.
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Although spending by CPG companies increased in 2008, shoppers stopped buying some categories altogether and reducing buying rates in others. However, price increases enabled CPG sales to grow 3% last year, although units were down 2.1%, Twitty said.
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Although private-label sales were up in 2008, “penetration in many, many categories was down almost as much,” he noted, with some consumers buying more frequently but buying fewer units per occasion.
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As overall pricing climbed 5.7%, some shoppers bought less in certain categories, while others opted out completely, he said. Of 122 categories surveyed, 87 categories, or about 70%, experienced penetration declines last year.
The hardest-hit categories, Twitty said, were “non-essential, nonfood categories — items that normally have longer purchase cycles, including electronics, tobacco, housewares, stationery, frozen novelties, air fresheners, kitchen gadgets and shaving needs.”
Categories that saw large shifts to private label included several commodity food categories characterized by the absence of dominant brands, he said, including milk, cheese, cookies, unprepared meats and seafood, ice cream, canned vegetables, nuts, butter, cooking oil and baking supplies.
In terms of categories where consumers bought less, many could be deemed non-essential or indulgences, Twitty said, including carbonated beverages, pet food, candy, shelf-stable juices, baby food, canned seafood and gum.
Categories that benefited from stocking-up or buying on deal included hair care, tea, bath soap, sugar, desserts and grooming aids — “non-perishable categories that are good candidates for stocking up when the price is right,” Twitty noted.
Categories where shoppers tended to wait for sales included cold remedies, batteries, household cleaners and cosmetics, he said.
Consumer staples that tend to grow in turbulent economic times, as at-home eating becomes more common, he said, included fresh produce, cereal, vitamins, beer and wine, detergents, condiments, pet care, soup, coffee, frozen vegetables, oral hygiene, crackers, jams and jellies, fresh meat, desserts and dough products.
