Presentation is loading. Please wait.

Presentation is loading. Please wait.

Todd Hale SVP, Consumer & Shopper Insights August 5, 2014 STATE OF THE INDUSTRY.

Similar presentations


Presentation on theme: "Todd Hale SVP, Consumer & Shopper Insights August 5, 2014 STATE OF THE INDUSTRY."— Presentation transcript:

1 Todd Hale SVP, Consumer & Shopper Insights August 5, 2014 STATE OF THE INDUSTRY

2 Copyright ©2014 The Nielsen Company. Confidential and proprietary. 2 TABLE OF CONTENTS Retail Landscape & Performance What’s Selling Retail Hot Buttons Closing Thoughts 2 2

3 RETAIL LANDSCAPE & PERFORMANCE

4 Copyright ©2014 The Nielsen Company. Confidential and proprietary. 4 IS FLAT THE BEST WE CAN EXPECT? Source: Nielsen Strategic Planner; Total U.S. All Outlets Combined (plus Convenience), All Departments, All Brands (UPC), % Change, 52 week periods vs. year ago All Departments Dollar Trend Unit Trend Average U Price Trend Any Promo U Trend Shouldn’t an economic recovery be delivering more growth?

5 5 Copyright ©2014 The Nielsen Company. Confidential and proprietary. Good News:Rising Consumer Confidence GOOD NEWS & BAD NEWS Sources: Nielsen; U.S. Government; *USA TODAY Good News:Home heating oil prices falling Good News:Social security recipients receive 1.5% cost of living increase Good News:Minimum wage increased in 13 states on 01/01/14

6 Copyright ©2014 The Nielsen Company. Confidential and proprietary. 6 VALUE & CONVENIENCE WINNING Source: Nielsen Scantrack, Total U.S., 52 weeks ending 06/07/2014 (vs. year ago), UPC-coded; *Club Stores, Dollar Stores, Mass-Merchandisers, Military Total measured channels: $777 Billion & up 1.2% All Departments – Dollar Sales & Trend Supermarkets C-Stores Drug Stores Value* Low GrowthHigh Growth

7 Copyright ©2014 The Nielsen Company. Confidential and proprietary. 7 VALUE & CONVENIENCE DRIVE STORE EXPANSION Source: Nielsen TDLinx Expansion from all formats but Mass Merchandisers in 2013 vs. previous year U.S. Store Counts 69% + of growth from niche formats Value & Convenience vs. 2005

8 RETAIL 2018 – WHAT’S IN STORE?

9 Copyright ©2014 The Nielsen Company. Confidential and proprietary. 9 E-COMMERCE THE BIG WINNER CAGR 2013 to 2018 Source: Nielsen TDLinx & Nielsen Analytics Winning Share Average Growth Losing Share

10 Copyright ©2014 The Nielsen Company. Confidential and proprietary. 10 E-COMMERCE COMING TO CPG, WHAT SPEED Source: U.S. Census Bureau; company reports & websites E-Commerce steadily growing sales Amazon $13.4 Walmart $7.5 Kroger $1.6 Amazon sales growth very impressive Global annual sales growth versus prior year (in billions) Step on the gas! Who can get there faster?AmazonFresh expanded from Seattle to Los Angeles & San Francisco

11 WHAT’S SELLING?

12 Copyright ©2014 The Nielsen Company. Confidential and proprietary. 12 DEMAND SHIFTS BEHIND WINNERS & LOSERS Source: Nielsen Strategic Planner, Total U.S. – All Outlets Combined (plus Convenience, 52 weeks ending 06/07/2014 (vs. 4-years ago), UPC-coded, 120 major category groupings Overall gains were $72 billion versus four years ago; 23 categories with decreases; 97 categories with increases Absolute Dollar Loss/Gain versus four years ago Top 10 with decreases vs. 4-years ago 1.Computer/Electronic Prods 2.Magazines Selected Title 3.Film & Cameras 4.Gum 5.Cereal 6.Detergents 7.Disposable Diapers 8.Office/School Supplies 9.Vegetables-Canned 10.Puddings/Desserts-Dairy Top 10 with increases vs. 4-years ago 1.Snacks 2.Fresh Produce 3.Candy 4.Coffee 5.Vitamins 6.Packaged Meat 7.Beer 8.Tobacco & Accessories 9.Cheese 10.Wine

13 Copyright ©2014 The Nielsen Company. Confidential and proprietary. 13 INFLATION & DEMAND DRIVING GROWTH Source: Nielsen Strategic Planner, Total U.S. – All Outlets Combined (plus Convenience), 52 weeks ending 06/07/2014 (vs. year ago), UPC-coded All Outlets Combined (plus Convenience) – Dollar Trend Center Store departments struggle

14 Copyright ©2014 The Nielsen Company. Confidential and proprietary. 14 CONSUMERS SHIFTING SPEND OR BUYING LESS Source: Nielsen Strategic Planner, Total U.S. – All Outlets Combined (plus Convenience), 52 weeks ending 06/07/2014 (vs. year ago), UPC-coded All Outlets Combined (plus Convenience) – Unit Trend Shouldn’t an economic recovery be delivering more unit growth?

15 Copyright ©2014 The Nielsen Company. Confidential and proprietary. 15 SUGAR DOLLAR SALES DROP WITH FALLING PRICES Source: Nielsen Answers; Total U.S. All Outlets Combined (plus Convenience), All Departments, All Brands (UPC), % Change, 52 week periods vs. year ago Total Sugar & Sugar Substitutes Dollar Trend Unit Trend +1-0 Average U Price Trend Any Promo U Trend Unit sales fairly flat for last 4 + years

16 16 Copyright ©2014 The Nielsen Company. Confidential and proprietary. KEY SUGAR INGREDIENT CATEGORIES GENERATE A LOT OF RETAIL REVENUE Dollar sales (billions) in Sugar categories * Includes HFCS sweetened & sugar sweetened Source: Nielsen Strategic Planner; Total U.S. All Outlets Combined (plus Convenience), All Brands (UPC), 52 weeks ending 7/5/ % Change YAGO NC Sales up or flat in these categories

17 17 Copyright ©2014 The Nielsen Company. Confidential and proprietary. RETAIL HOT BUTTONS Price & Value Winning with Non-Edibles Food Fight Health & Wellness Private Brands Connecting with Shoppers That Matter Sustainability Right-Sized Box Digital Shopping Experiential Retailing

18 FOOD FIGHT

19 Copyright ©2014 The Nielsen Company. Confidential and proprietary. 19 CONSUMERS FLOCK TO FRESH Source: Nielsen Perishables Group FreshFacts, Total U.S. – Fresh Coverage Area (grocery + WM, Sam’s Club and Target); 52 weeks ending 5/31/2014 (vs. year ago) Dollar growth for all & volume gains in most; higher prices part of the mix too

20 Copyright ©2014 The Nielsen Company. Confidential and proprietary. 20 DELI PREPARED FOODS GROWING Sources: *Nielsen Perishables Group FreshFacts, Total U.S. – Fresh Coverage Area (grocery + WM, Sam’s Club and Target); 52 weeks ending 5/31/2014 (vs. year ago); **Nielsen Scantrack, Total U.S. – All Outlets Combined, plus Convenience, 52 weeks ending 6/7/2014 (vs. year ago), UPC only; ***NPD Group Growth continues as shoppers choose meals & meal components over ingredients Total Store ** Unit Growth: +0.2% Prepared food purchases from supermarkets, drug stores & other retail outlets will GROW 10% BY 2022***

21 21 Copyright ©2014 The Nielsen Company. Confidential and proprietary. BAKERY DEPARTMENT CAPTURING GROWTH IN CATEGORIES WHERE SUGAR IS KEY INGREDIENT Growth continues as shoppers choose meals & meal components over ingredients Sources: *Nielsen Perishables Group FreshFacts, Total U.S. – Fresh Coverage Area (grocery + WM, Sam’s Club and Target); 52 weeks ending 5/31/2014 (vs. year ago); **Nielsen Scantrack, Total U.S. – All Outlets Combined, plus Convenience, 52 weeks ending 6/7/2014 (vs. year ago), UPC only; ***NPD Group Total Store ** Unit Growth: +0.2%

22 22 Copyright ©2014 The Nielsen Company. Confidential and proprietary. Daily dinner deals “Grab & Go” foods New garden cooler, which keeps fruits and vegetables fresher, longer Expanded gluten-free section $1 Deals New Food Lion-brand beef in sealed-fresh packaging FOOD LION DEBUTS NEW STORE FORMAT Sources: Food Lion, Supermarket News & Salisbury Post (photos)

23 23 Copyright ©2014 The Nielsen Company. Confidential and proprietary. SEE HOW YOUR TARGET'S BEEN REFRESHED 1,261 Target stores w/expanded food Source: Target

24 24 Copyright ©2014 The Nielsen Company. Confidential and proprietary. INTEGRATED CAMPAIGN TO REVIVE ESTABLISHED CATEGORIES Source: Cans Get You Cooking “Cans get you cooking, a multi-year, fully-integrated campaign”

25 25 Copyright ©2014 The Nielsen Company. Confidential and proprietary. Source: “new displays, menu boards & signage in Walmart’s gave Coke a level of branding never seen before” FISH WHERE THE FISH ARE! Secondary location with multi-media support

26 26 Copyright ©2014 The Nielsen Company. Confidential and proprietary. Source: Photography: Mark A. Steele Photography, Columbus, Ohio; Note: capex = capital expenditures SHAKING UP THE AISLE Is it time to convert trade spend to capex spend?

27 27 Copyright ©2014 The Nielsen Company. Confidential and proprietary. LONG-TERM FOOD-AWAY-FROM-HOME SHARE AT HIGHEST POINT EVER Share of total U.S. food expenditures: Source: Calculated by the Economic Research Service, USDA, from various data sets from the U.S. Census Bureau and the Bureau of Labor Statistics. Food expenditures based on actual sales 50.5% 49.5%

28 28 Copyright ©2014 The Nielsen Company. Confidential and proprietary. PERFORMANCE INDEX ABOVE 100 FOR THE 15 TH CONSECUTIVE MONTH; HIGHEST IN OVER 2 YEARS Source:

29 PRIVATE BRANDS

30 Copyright ©2014 The Nielsen Company. Confidential and proprietary. 30 Dollar Sales Trend Private Brand+5%+8%+2% Branded+1%+3%+2%+1% JUST OUTPACING BRAND GROWTH SINCE 2012 Source: Nielsen Strategic Planner, Total U.S. – All Outlets Combined (xAOC), Total All Departments, UPC-coded All Departments

31 Copyright ©2014 The Nielsen Company. Confidential and proprietary. 31 WHERE ARE THE GROWTH OPPORTUNITIES? Source: Nielsen Strategic Planner, Total U.S. – All Outlets Combined (xAOC), 52 weeks ending 06/07/2014 (vs. year ago), UPC-coded, 116 major category groupings Are they bigger in low or high share categories? What other considerations? Private Brands: Dollar Share Edibles Non-Edibles Top 10 1.Milk 2.Eggs-Fresh 3.Sugar/Sugar Substitutes 4.Wrapping Materials Bags 5.Dessert/Fruit/Tops-Froz 6.Unprep Meat/Seafood-Frz 7.Fruit-Canned 8.Pain Remedies 9.Cheese 10.First Aid 17.5% Average $ Share Bottom 10 1.Computer/Electronic Prods 2.Beer 3.Deodorant 4.Tobacco & Accessories 5.Gum 6.Canning/Freezing Supplies 7.Wine 8.Liquor 9.Hair Care 10.Insecticides Repellants

32 Copyright ©2014 The Nielsen Company. Confidential and proprietary. 32 SUPERMARKETS DOMINATE BEST OF BREED Source: Nielsen Homescan, 52 weeks ending 12/28/2013, UPC-coded items Limited assortment/extreme discount formats lead the way Store Brands $ Share of Total Store Supermarkets Club Mass w/Supers Dollar Drug Average 24% 20% 18%

33 33 Copyright ©2014 The Nielsen Company. Confidential and proprietary. “PRIVATE-LABEL FOODS OFTEN MEET OR BEAT THE BIG BRANDS” Source: NBC News & Consumer Reports Consumer Reports August 2013 Our expert tasters judged 33 of 57 store-brand foods as good as or better than the national brand. In categories such as ice cream, trail mix, mozzarella, mixed vegetables, and more, we found at least one store brand from the national grocers Costco, Kmart, Sam's Club, Target, Trader Joe's, Walmart, and Whole Foods that was equal in quality to the big name.

34 34 Copyright ©2014 The Nielsen Company. Confidential and proprietary. KROGER SIMPLE TRUTH EXPECTED TO HIT $1 BILLION; H-E-B INTRODUCES AFFORDABLE ORGANIC OPTIONS Source: Todd Hale (in-store photo); Kroger, H-E-B Beef Teas Salads Carrots Café Ole Oatmeal & Cereals H-E-B- shelf tag Kroger’s eye catching in-store merchandising; its own website & array of social media

35 35 Copyright ©2014 The Nielsen Company. Confidential and proprietary. WALMART & WILD OATS TO DRIVE DOWN ORGANIC FOOD PRICES Source: Walmart Nearly 100 organic products – no price premium

36 36 Copyright ©2014 The Nielsen Company. Confidential and proprietary. BACK TO THE FUTURE Source: Facebook (Walmart-Lebanon); My Private Brand Walmart testing Extreme Value Brand

37 37 Copyright ©2014 The Nielsen Company. Confidential and proprietary. FRESHDIRECT LAUNCHED TWO PRIVATE BRANDS Source: mypbrand.com Mypbrands.com Dec. 2, 2013 Cloud 9 is about high quality, effective products in the household and cleaning categories that our customers can count on to get the job right. JUST FreshDirect will include food products with a focus on simple, short ingredient statements, wholesome ingredients and transparency when it comes to what’s in each product. One of the key elements to our JUST FreshDirect brand is that we have a list of prohibited ingredients. We have plans to launch over 150 new private brand products in 2014… We also have more brands in the works so expect more exciting news over the next year.

38 CONNECTING WITH SHOPPERS THAT MATTER

39 39 Copyright ©2014 The Nielsen Company. Confidential and proprietary. ALL GROUPS HAVE LOST SINCE 2000 But Blacks & Hispanics have suffered the most Source: USA TODAY (story by Tim Mullaney; graphics by Frank Pampa & Anne R. Carey – 9/18/2013)) % Change vs. 2000: Non-Hispanic White: -6.3% Asian: -7.7% Hispanic: -11.8% Black: -15.8%

40 40 Copyright ©2014 The Nielsen Company. Confidential and proprietary. DIVERSITY IN SUGAR BUYING & IN CATEGORIES WHERE SUGAR IS KEY INGREDIENT Source: Nielsen Homescan, Total U.S. 52 weeks ending 12/28/2013, UPC-coded products; Note: Categories include sugar-free products WHITE NON-HISPANIC AFRICAN AMERICAN ASIAN HISPANIC (any race) CANDY JAMS/JELLIES/ SPREADS SUGAR/SUGAR SUBSTITUTES BREAD & BAKED GOODS CEREAL COOKIES/ICE CREAM CONES CARBONATED BEVERAGES JUICES-DRINKS-SHELF STABLE JUICES-DRINKS-REFRIGERATED ICE CREAM Annual $ Per Household Among Category Buyers Watch Out: a number of categories with low buying rates among multicultural

41 41 Copyright ©2014 The Nielsen Company. Confidential and proprietary. BY 2020, MILLENNIALS WILL OUTNUMBER BOOMERS BY TEN MILLION U.S. Population Projections Source: U.S. Census Bureau (2012 National Population Projections) Population (millions) Millennials Gen X Boomers 37 million 25 million 40 million 34 million 24 million 41 million Age

42 Copyright ©2014 The Nielsen Company. Confidential and proprietary. 42 GRAY POWER SURGE Source: U.S. Census Bureau (2012 National Population Projections) Will advances in medical technology alter the curve? Percentage Millions 100 0

43 Copyright ©2014 The Nielsen Company. Confidential and proprietary. 43 OLDER MORE TRIPS; YOUNGER BIGGER BASKETS Source: Nielsen Homescan, Total U.S. 52 weeks ending 12/28/2013, excludes gas only or Rx only trips; *UPC-coded products Total Retail Channels Millennials more deal prone

44 44 Copyright ©2014 The Nielsen Company. Confidential and proprietary. MILLENNIALS LESS ENGAGED IN SUGAR & IN KEY SUGAR INGREDIENT CATEGORIES Source: Nielsen Homescan, Total U.S. 52 weeks ending 12/28/2013, UPC-coded products; Note: Categories include sugar-free products GREATEST GENERATION BOOMERSGENERATION XMILLENNIALS CANDY JAMS/JELLIES/ SPREADS SUGAR/SUGAR SUBSTITUTES BREAD & BAKED GOODS CEREAL COOKIES/ICE CREAM CONES CARBONATED BEVERAGES JUICES-DRINKS-SHELF STABLE JUICES-DRINKS-REFRIGERATED ICE CREAM Annual $ Per Household Among Category Buyers

45 45 Copyright ©2014 The Nielsen Company. Confidential and proprietary. TARGET TRIES TO WIN HEARTS & CLICKS OF MILLENNIALS & COLLEGE STUDENTS Replacing in-store registry kiosks with iPads; replacing scanning guns with the iPod Touch Source: Target Target overhauling their wedding & baby registry business, integrated shopping lists with live store maps, and testing same-day delivery for some online orders; and introduces first ever college registry

46 46 Copyright ©2014 The Nielsen Company. Confidential and proprietary. HEALTH & BEAUTY CARE SENIOR FOCUS Sources: MultiAd Kwikee & company websites

47 47 Copyright ©2014 The Nielsen Company. Confidential and proprietary. SMALLER PORTION SIZES, BUT WHAT ELSE? Source: MultiAd Kwikee

48 48 Copyright ©2014 The Nielsen Company. Confidential and proprietary. HEALTH & WELLNESS ENTHUSIASTS W/STRONG BUY RATE IN MANY KEY SUGAR CATEGORIES Source: NMI, Health & Wellness Segmentation, Total U.S. – 52 weeks ending 12/28/2013, UPC-coded; Note: Categories include sugar-free products WELL BEING FOOD ACTIVES MAGIC BULLETS FENCE SITTERS EAT, DRINK & BE MERRIES CANDY JAMS/JELLIES/ SPREADS SUGAR/SWEETENERS BREAD & BAKED GOODS CEREAL COOKIES CARBONATED BEVERAGES JUICES-DRINKS-SHELF STABLE JUICES-DRINKS-REFRIGERATED ICE CREAM $ Buying Rate Index

49 DIGITAL SHOPPING

50 50 Copyright ©2014 The Nielsen Company. Confidential and proprietary. AMAZON GETS IT Sources: https://www.amazon.com/gp/subscribe-and-save/details/index.html https://fresh.amazon.com/dash AMAZON GOING AFTER REGULARLY SCHEDULED BUYS COMPETITION HEATS UP W/AMAZON PRIME PANTRY “THE NEW WAY TO SHOP FROM HOME”

51 51 Copyright ©2014 The Nielsen Company. Confidential and proprietary. “TARGET EXPANDS SUBSCRIPTION SERVICE TENFOLD” Source: Target nearly 1,600 items… Everything from beauty products and pet supplies to home office supplies, are now available for regular delivery… free subscription program allows people to schedule shipments in four, six, eight, 10 and 12-week installments. Associated Press Apr. 17, 2014

52 52 Copyright ©2014 The Nielsen Company. Confidential and proprietary. ONLINE GROCERY SALES TO DOUBLE IN FIVE KEY EUROPEAN MARKETS BY 2016 Source: Reuters Britain, France, Germany, Switzerland and the Netherlands Joanne Denney-Finch, chief executive, IGD Reuters (Berlin), Oct. 23, 2013 Online retailing in food and consumer goods is growing at a phenomenal rate across Europe. Technology is empowering people, fundamentally changing the way they buy groceries

53 53 Copyright ©2014 The Nielsen Company. Confidential and proprietary. HIGH INTEREST IN CLICK & COLLECT Source: Nielsen Global Consumer Confidence Survey About Aging, Q (fielded 8/14/2013 – 9/6/2013) GLOBAL AVERAGE NORTH AMERICA Order online for home delivery 37% 54% 20% 64% Order online pick- up inside of store 17% 65% 17% 68% Order online pick- up via drive-thru 16% 66% 12% 68% Order online pick- up curbside 13% 64% 11% 69% ALREADY USINGDEFINITELY/SOMEWHAT WILLING

54 54 Copyright ©2014 The Nielsen Company. Confidential and proprietary. TRADITIONAL RETAILERS MAKING AN IMPACT ONLINE “Ahold has a company-wide target to triple its online food sales by 2016” Sources: Ahold; Peapod; Crain’s Chicago Business; Chicago Tribune; Harris Teeter HARRIS TEETER DEBUTS ANNUAL SUBSCRIPTION $99.95 for the entire year, no limit to number of orders placed; curbside pick up PEAPOD EXPANDS NUMBER OF PICK UP LOCATIONS

55 55 Copyright ©2014 The Nielsen Company. Confidential and proprietary. WALMART INVESTING IN DRIVE THROUGH GROCERY PICK UP Sources: The City Wire & ASDA “The 15,000 square-foot facility will house 10,000 fresh and dry grocery products – from cereal, chips and bread to fresh produce, meat and milk” The as-yet unnamed and unbuilt internet pick-up outlet will carry some 10,000 SKUs and be staffed by logistics employees at Walmart. They will assemble orders made online and deliver to cars in as many as 30 drive-up lanes. The concept is based on a similar offering at Walmart’s United Kingdom banner, Asda, said Judith McKenna, chief development officer at Walmart and a former Asda exec. The City Wire May 7, 2014

56 56 Copyright ©2014 The Nielsen Company. Confidential and proprietary. MERCHANDISING WIDE VARIETY OF CATEGORIES Source: Company websites Have you noticed Walgreens online ad includes more pages than their print edition?

57 57 Copyright ©2014 The Nielsen Company. Confidential and proprietary. WALMART TEXTING RECEIPTS TO BRING LOYALTY CARD CAPABILITIES TO THEIR OFFERING Source: Milwaukee Journal Sentinel & NFC World(photo) Milwaukee Journal Sentinel Apr. 23, 2014 Walmart plans to analyze the large amounts of data it collects through e-receipts and use it as a marketing tool. It enables Walmart to track what its customers buy, where and when and send personalized offers to shoppers who want it. A Walmart executive said the retailer could send coupons to customers for their favorite brands or shopping lists of items they may want to buy during their next visit. Customers will be identified through their phone number.

58 CLOSING THOUGHTS

59 CHASING THE CUSTOMER … NOT THE COMPETITION! RONALD LUNDE

60 WHAT WOULD YOU DO IF YOU WEREN’T AFRAID? SPENCER JOHNSON

61

62 62 Copyright ©2014 The Nielsen Company. Confidential and proprietary. STAY CONNECTED


Download ppt "Todd Hale SVP, Consumer & Shopper Insights August 5, 2014 STATE OF THE INDUSTRY."

Similar presentations


Ads by Google