The Homa Files

Excerpted from the Progressive Grocer, “Nielsen Consumer Insight Report Offers Ways for Retailers to Navigate Rough Economic Seas“, January 8, 2009

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How to Cope During Difficult Economic Times,” a Nielsen Consumer Insight report provides value programs and dramatic cost-reduction strategies to help retailers struggling to attract beleaguered shoppers.

While declines in discretionary expenditures have been taking a toll on low-, mid-, and high-end department stores, select retailers within grocery, dollar, club, and drug stores fared better. Retailers carrying more “need-to-have”, not “nice-to-have,” assortment have registered positive same-store sales growth. 

Consumers — protective of their spending power — learned to trade down to value channels, reduce purchase frequency, move from on-premise consumption to off-premise purchasing, and downscale from premium to mid-tier or value brands.

Fully 40 percent of shoppers think that food and personal care prices have increased over the past three months.

When offered some ideas for coping, consumers expressed a preference for larger sizes with a lower price per serving (47 percent of shoppers) over smaller pack sizes at lower prices (17 percent).

Nielsen research shows that shoppers are increasingly happy with private label products, calling them a good alternative to name brands, at parity with or better than national names on quality criteria, while offering good pricing and value. The social stigma is gone, along with boring generic-looking packaging. Many retailers treat private label and exclusive brands as an integral part of their corporate brand image.

Forecasts call for continuing tough times and economic instability that filters throughout the economy. In short, we can brace for more of the same, and expect existing behaviors to intensify. Shoppers will first meet their basic needs and forgo discretionary purchases.

At-home opportunities will climb. Variety and convenience will take a back seat to value. Trading down will become an acceptable way to stretch budgets. Local sourcing gains traction, not as a green activity, but rather as a strategy for controlling costs, delivering value, and maintaining product freshness.

Edit by NRV

Full article:
“http://www.progressivegrocer.com/progressivegrocer/content_display/features/center-store/e3i9953839003c11ce8daf4ca7117546a38?imw=Y 

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This entry was posted on February 9, 2009 at 7:09 am and is filed under Mktg - Brands, Mktg - Pricing, Value Mapping. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.