Top Consumer Goods Spending Trends – 2010

by Todd Hale, Nielsen, December – 2009

Gloom or Boom?

While consumers around the world are more confident about the year ahead, Americans still seem relatively unconvinced there will be drastic improvement. And they have good reason to be leery. The “jobless” recovery—like government bailouts—hasn’t yet touched consumers.

Top Five Consumer Goods Spending Trends in 2010:

1. Restraint remains the new normal.
Americans’ confidence has been slower to rebound compared to other parts of the world. The need to save money, unemployment and other economic issues continue to be top of mind, suggesting that any return to past behavior may take some time—if at all.

2. Value is a top priority.
With no signs of readiness to open wallets, a focus on low prices at the expense of all other variables threatens margins. Value messaging must also include some point of differentiation beyond pricing. Manufacturers and retailers that “drive the recession wave” and take an active role in innovation and ad spending are likely to be the big winners.

3. Store brand growth continues. Even with year-end 2009 softness in store brand dollar share growth as retailers cut prices across the store to be more competitive, unit share growth continues and retailer focus has never been stronger.

4. Grocery consolidation intensifies.
Local and regional players, unable to drive profits in the soft economy, will become acquisition targets and some larger national and regional grocers will divest unprofitable formats and banners to strengthen investments behind their winning formats and banners.

5. Assortment wars escalate.
Retailer efforts to simplify the consumer shopping experience by eliminating aisle and shelf clutter will cause market share land grabs for small and medium-sized brands in pursuit of elusive revenue growth. Retailers may lose sales as they shift away from in-store merchandising that drove impulse buying and built shopper baskets. Look for brands caught in the trap of greater store brand focus and assortment optimization to forge alliances with key retailers, enter or step-up efforts as store brand suppliers, and/or explore direct-to-consumer sales.

Read entire article on Brandweek – http://tinyurl.com/ykhokh7

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~ by sjfrenda on December 24, 2009.

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