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27.8.2010 ”Migration” of us shoppers thretens brands

A widespread trend of "channel and consumption migration" among US shoppers is posing major challenges to retailers and consumer packaged goods manufacturers, according to a study. SymphonyIRI, the research firm, argueda variety of "rituals" now define the way Americans make purchases, like frequently switching between brands to find the lowest price. At present, 25% of customers shop in five channels - such as grocery, mass merchant, drug, dollar and discount stores - rising to 28% in six, 19% in seven and 5% who are buying products from eight sources.

Possible savings remain a key differentiating factor, with 47% of people selecting the grocery chain they visited most recently as it would hopefully prove to be the cheapest. "Price plays a central role in the struggle, pushing CPG marketers to develop innovative new programmes aimed at protecting and growing share," SymphonyIRI said.

In Q2 2010, the overall number of shopping trips shrank by nearly 2% year-on-year, and the median value of a basket declined 1.5%. Typical expenditure when "pantry stocking" fell 4% on an annual basis, while "fill in" outlay was down a similar amount and "special purpose" receipts decreased 8%, leaving "quick trips" as the only sector to increase, up 1%. Average spending per visit posted a contraction of around 1.5% in grocery and supercenters, climbing to 2.4% in club warehouses. Elsewhere, mass retailers experienced a jump of 0.9%, drugstores by 1.7%, dollar chains by 3.8% and C-stores by 8%.

Loyalty programmes such as RiteAid's Wellness platform supported this development, as did the broader assortment of goods sold by dollar stores. However, supercenters recorded the largest gain in penetration, registering an expansion of 1.9% in the last year to 69.5%, seemingly at the expense of mass retailers, which were off by 2.3% to 71.6%. "Supercenters are reputed to offer everyday low prices. Among consumers looking to manage their CPG budgets closely, this type of strategy is generally well received," the SymphonyIRI study stated.

To take one example, Target has increasingly emphasised value in recent months, generating an increase in sales as a consequence. By contrast, convenience stores saw a decrease of 1.9% to 29.2%. "The channel is regarded as a quick and easy outlet for discretionary purchases. But with budgets stretched tight, consumers have reduced and/or eliminated many non-essential purchases," the report said.
B.L. 27.8.2010