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Private Label Manufacturers Association Feb 2013.

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Presentation on theme: "Private Label Manufacturers Association Feb 2013."— Presentation transcript:

1 Private Label Manufacturers Association Feb 2013

2 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 2 AGENDA 1.Customer and Manufacturer Mindset 2.The Market 3.Private Label Performance 4.Christmas Snap Shot

3 CUSTOMER AND MANUFACTURER MIND SET

4 Copyright ©2012 The Nielsen Company. Confidential and proprietary. 4 Consumer Confidence continues to erode, with bleak outlook for coming year Manufacturer Outlook is divided, but pessimistic about current trends and activities Trade Spend is reaching saturation point and no longer delivering on its promise Retailer Relationships are being damaged by perceived power and cost imbalances

5 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 5 feel they need to cut back on Trade Spend, compared to 38% who see it boosting ROI. 38% 39% 65% 25% of consumers think we are in a recession – 6% more than in Q of manufacturers feel that business conditions have declined since this time last year of manufacturers consider their relationship with Woolworths to be “Poor” or “Very Poor”.

6 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 6 THOSE WHO FEEL WE ARE IN RECESSION HAS DOUBLED SINCE THE SAME TIME IN Q First time confidence has been below 100 at year’s end Source: Nielsen Global Survey, Q4-2012, Base: All respondents (Australia), Field Dates: November , 2012 Q: Do you think your country is in an economic recession at the moment?

7 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 7 PEOPLE PERCEIVE FUTURE JOB PROSPECTS TO BE BLEAK ALMOST DOUBLING COMPARED TO Q4, 2010 Q: What are your perceptions of Local Job Prospects over the NEXT 12 Months? Source: Nielsen Global Survey, Q4-2012, Base: All respondents (Australia), Field Dates: November , 2012

8 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 8 THIS IS COMPOUNDED BY COST OF LIVING PRESSURES AND HEALTH CONCERNS Q: What are your major top two concerns over the next 6 months? Source: Nielsen Global Survey, Q4-2012, Base: All respondents (Australia), Field Dates: November , 2012

9 THE MARKET

10 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 10 AUSTRALIA Fast Moving Consumer Goods market dynamics | Scan Data Nielsen Scan Data based on the widest possible basket of product categories that are continuously tracked by Nielsen in each of these countries and channels. In most cases this reflects 60 – 80% of all Longlife categories. For Australia, this is 75% of categories. Australia continues to experience a slowing rate of FMCG price inflation, which is a recurring pattern in other countries in the region.

11 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 11 Fast Moving Consumer Goods market dynamics | Scan Data REGIONAL SUMMARY (QUARTER 4) The region continues to see strong growth, with volumes up 7% and overall dollar sales growth of 12.7% Nielsen Scan Data based on the widest possible basket of product categories that are continuously tracked by Nielsen in each of these countries and channels. In most cases this reflects 60 – 80% of all Longlife categories. For Australia, this is 75% of categories.

12 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 12 Suppliers$ Growth Top 5+1.5% Next % Top 101 – 200+7% Supermarket $ Growth 2.5% excl PL/Tobacco Retail Barometer Source: Nielsen | ScanTrack Australia MAT to 23/12/2012 vs Yr Ago $122M $663M $92M

13 Copyright ©2013 The Nielsen Company. Confidential and proprietary out of 5 will change depth 3 out of 5 will change frequency Only 1 in 6 will change number of items on promotion 87% will change promotional activities Source: Nielsen Retail Barometer, Q4-2012, Base: All respondents (n=92), Field Dates: November , 2012

14 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 14 is leader on consumer focused activities. is leader on strategic, and manufacturer focused activities. is leader on supply chain. Source: Nielsen Retail Barometer, Q4-2012, Base: All respondents (n=92), Field Dates: November , 2012

15 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 15 IN-MARKET SUCCESS AS COLES CONTINUES TO CLOSE THE GAP ON WOOLWORTHS Market Share % by Retailer 2012 (vs. 2011) 7.6% % % % Source: Nielsen | Homescan, Total Australia, MAT to

16 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 16 COLES ENJOYING BROAD SUCCESS ACROSS ALL SOCIO- DEMOGRAPHIC CLUSTERS FOLLOWED BY ALDI HIGH Income HIGH Density LOW Income LOW Density Families Singles & Couples High Income Med Income Low Income Retailer % Growth Vs Total AUS – 2012 RETAILER GROWTH % AHEAD OF TOTAL AUS Source: Nielsen | Homescan, Total Australia, MAT to

17 LETS TALK PRIVATE LABEL!

18 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 18 % VALUE SHARE OF PRIVATE LABEL TO TOTAL PACKAGED GROCERY SALES Private Label has gained an increase in Share in WOW. Small decrease in PL Share for Coles. Branded products highly increasing their share in Aldi

19 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 19 Start up families increasing their spend on private labels faster than other demographic groups Families Share on Private Label Trended, Total Supermarkets

20 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 20 CUSTOMERS BUYING MORE, PENETRATION INCREASES AND OVERALL SHARE INCREASING -4.2% PenetrationPenetration AWOPAWOP PL VAL Share Homescan QTR to 26/01/ % +0.9% +1.0% Source: Nielsen | Homescan (Australia) – Issue# / Q Nielsen Private Label Report -6.0% +4.6% +0.0% +8.4% +2.1% +2.8% -3.4% -5.6%

21 WHICH PRODUCTS DO SHOPPERS WANT IN PRIVATE LABEL

22 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 22 Purchased in National brands Promotional Vulnerable PL Purchased primarily in Private Label Pet FoodCoffee MilkIce Cream Block CheeseConvenience Frozen Soft DrinksMedicinal Products Biscuits And CookiesFrozen Vegetables Chilled DessertsVitamins ConfectioneryToilet Paper CerealChilled Spreads SnacksHeat And Eat Frozen Packaged BreadIn store Bread Shopping list THERE ARE 20 CATEGORIES WHICH ACCOUNT FOR 50% OF THE HEAVY PRIVATE LABEL BUYERS SPEND OVER A YEAR IN AUSTRALIA

23 WHAT TURNS ON THE PRIVATE LABEL SHOPPER

24 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 24 Attitudinal, Media and Lifestyle pen portrait of a Heavy Private Label Buyer … to purchase Food, Grocery and Toys They watch family movies together They keep an eye on their children eating habits They like to try new brands In-Store advertisement influence their purchase decisions They use internet …

25 CHRISTMAS SNAP SHOT

26 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 26 Strong Christmas Theme: Fresh and Value All Your Needs for Christmas Strong Christmas Theme: Fresh and Value All Your Needs for Christmas Strong Christmas Theme: Quality and Fresh All Your Needs for Christmas Strong Christmas Theme: Quality and Fresh All Your Needs for Christmas CHRISTMAS THEMES Strong Christmas Theme: Fun and Lowest Prices Strong Christmas Theme: Fun and Lowest Prices

27 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 27 Share of Trade Growth in Media Spend Share of Trade: Source: Nielsen Homescan, 13 weeks to 29/12/2012. Media Spend: Source: Nielsen Media, 8 weeks to 29/12/2012, data derived from free-to-air channel rate cards after discounts applied. Discounts are derived on a per advertiser basis, based on industry body information. Nielsen aims for this measure to be as accurate as possible, but deviation from the total universe may occur. Shopper Trends: Source: Nielsen Customized Research (CR), based on January telephone survey from a CR Panel (separate to the Homescan panel) (n = 3007 for location of shopping question, n = 3358 for best supermarket winner question). Thinking about your overall experience (including out-of- store marketing), who do you think should ‘win’ the best Overall Supermarket for Christmas 2012? At which of the following supermarkets did you complete the majority of your Christmas shopping? 37.7% 29.0%8.1% -4.9% +14.3%+143.8% 1 st (28%) 2 nd (24%)3 rd (14%) 1 st (37%) 2 nd (30%)3 rd (10%) Aldi performing ahead of expectation over the Christmas period. CHRISTMAS SHOPPER TRENDS

28 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 28 Shopper Trends: Source: Nielsen Customized Research, based on January questionnaire (n = 2953). Aldi’s performance over Christmas has been driven in some area’s that aren’t traditional Aldi strengths. CHRISTMAS SHOPPER TRENDS Which of the following reasons describe why you chose to shop at your chosen retailer for the majority of your Christmas shop?

29 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 29 While switching to Coles and ALDI has tapered back, the switching to these two retailers was worth $53m in lost sales in the Christmas Quarter. SWITCHING: TOTAL BUSINESS (ROLLING QUARTERS) Lost sales = $53m Source: Nielsen Homescan

30 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 30 WOW shoppers increased their spend in WOW stores, but lagged behind Coles (by $4.50) and ALDI (by $3.70). More shoppers in stores (+0.7%) Shoppers spending more in Total Quarter (+$15.30) Shoppers spending more per visit (+$1.10) Shoppers visiting less frequently (-0.1%) +0.0% +2.5% +0.1% +0.2% +$ $ $0.40 +$0.50 SHOPPER KEY METRICS Time periods are 13 weeks to week ending 29/12/2012 vs 13 weeks to week ending 31/12/2011. Source: Nielsen Homescan

31 ALDI’S CHRISTMAS

32 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 32 ALDI stocked more branded items this Christmas than ever before – offerings which were on average 75c cheaper than WOW and $1.19 cheaper than Coles. Time periods are 13 weeks to week ending 29/12/2012, 2011 to week ending 31/12/2011, 2010 to week ending 01/01/2011. Source: Nielsen Homescan The New ALDI Buyer PenetrationAWOP ($)Avg Price ($) Per Unit Perceived % Value on Promo / / / /- Australia Woolworths Coles ALDI % Retailer share amongst Aldi’s branded Christmas stock

33 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 33 ALDI’S NEW SHOPPERS DEMOGRAPHIC PROFILE Time periods are 13 weeks to week ending 29/12/2012, 2011 to week ending 31/12/2011, 2010 to week ending 01/01/2011. Source: Nielsen Homescan The new ALDI shopper is predominantly families, notably Small Scale Families. This links in with the longer term trend seen at an All Shopper level, where families are switching out of WOW and into Coles and ALDI. Families Main Shopper <44yo Medium Income HHs

34 Copyright ©2013 The Nielsen Company. Confidential and proprietary % share of eastern seaboard Strength is price Range = 1200 items Basket size is 90% of WW / Coles Strong in fresh Skewed towards families Strongest rel’ship with suppliers Brightest future according to Aust. Suppliers Plans to open in South & Western Australia 50% of household’s shopping 300 stores ALDI

35 SUMMARY OF TRENDS

36 Copyright ©2013 The Nielsen Company. Confidential and proprietary. 36 SUMMARY OF TRENDS Consumer and Manufacturer confidence continues to erode, with bleak outlook for coming year. Coles & Aldi winning in the market – both attracting Woolworths key shoppers PL continuing to grow in the Australian market, but growth slowing as market becomes more mature Private Label growth opportunities increasingly focused on more premium non- traditional areas Balancing both Private Label & Branded important to retailers in winning Christmas Aldi growth into SA & WA likely to increase the acceptability of Private Label within the Australian market

37 THANKYOU


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