Australia’s resilience in the midst of global economic uncertainty is envied by many of the world’s developed nations. Nonetheless, Australian consumers are increasingly apprehensive about the impact of the world financial situation on their own economy and personal finances. With consumer confidence sliding in the most recent quarter to its lowest level since the global financial crisis of 2009 to an interim index of 97 in August, shoppers are changing the way they spend their money, what they spend it on and where they make their purchases.

The legacy of the global financial crisis has provided many lessons for Australian consumers, and the change in consumer shopping behavior is shaping a rapidly evolving retail landscape.

State of the Nation
Australia is one of the few countries that emerged from the 2008-2009 recession relatively unscathed. With nearly full employment, one might expect Australian consumers to be confident in comparison to other nations. But there are a number of factors darkening Australians’ outlook: some analysts expect higher unemployment, which increased in July. In that same month, inflation went up 0.3 percent to 3.6 percent, causing the prices of basic necessities to increase. Likewise, utility rates are higher, there is uncertainty about the carbon tax and its likely effects on the average household, and massive market fluctuations caused by economic jitters in the U.S. and Europe have made investors nervous. Finally, natural disasters in neighboring New Zealand and Japan have taken their toll. These factors have Australian consumers acting with an almost recessionary mindset, exhibited by a renewed desire to save for the long term and to cut household budgets.

These conditions have resulted in a number of new shopping trends:

• The average number of store visits is down (with the exception of online visits) and shoppers may visit four or more stores to fill their shopping needs in search of discounts.
• Shoppers are increasingly looking for value, and the major supermarkets are attracting more and more shoppers with promotions, at the expense of convenience stores, independent supermarkets and specialty outlets.
• Shoppers are buying more private label goods.

What’s a retailer to do?

Private label is one area where retailers can differentiate themselves. Nearly two-thirds (64%) of Australian households already think that private label products are as good as name brands, and the overall spend on private label goods accounts for nearly a quarter (24.6%) of the total money spent at grocery stores in the most recent quarter—up from 23.1 percent in the same period a year ago. This growth has been driven by lower prices and improved, consistent quality, resulting in volume growth from all shopper demographic groups.

Nielsen’s latest Retail Barometer survey indicates that the success of a retailer in volatile economic periods is not just measured on the best product and price offerings, but the extent to which retailers can leverage their existing trading relationships with suppliers, and how well they can execute their strategies in driving efficiencies and balancing promotions, leading to increased footfall and profits.

Despite a constantly shifting retail landscape, one thing is certain: retailers and suppliers must adapt to the changing habits of Australian shoppers who are becoming increasingly skittish about their country’s economy. According to Nielsen’s latest quarterly global consumer confidence survey, Aussies have indicated that even when economic conditions do improve they will continue to be frugal. This means that getting the right value proposition is of paramount importance – those retailers and suppliers that understand how consumers are feeling and adjust their strategies accordingly should be well positioned to capitalize on these trends.

There is no doubt that U.S. store brands benefited greatly from the Great Recession of 2008-2009. The quality of today’s store brand offerings coupled with more value-conscious consumers looking to stretch their dollars ignited a sales boom. In the U.S., private label sales increased 1.8 share points from the end of 2007 to the end of 2008 to reach a 22.3 percent market share.

The reputation of store brands today continues to improve. Nielsen research shows that three-quarters of consumers believe store brands are a good alternative to name brands and two out of three agree that quality is also on par. And fewer consumers view store brands as those geared towards people on tight budgets who are unable to afford “the best”.

But since the end of 2008, store brand share growth across food, drug and mass has been fairly flat as brands stepped-up their promotion support and innovation efforts and some retailers took on a “build it and they would come” strategy. Today, national brands still command 78 percent of CPG unit sales.

Store brands may have reached a new share plateau, but long-term growth will be fueled by both consumers’ interest in value and retailers’ focus to drive margin and build banner equity. Retailers need to manage their store brands like manufacturers do – by investing in research to identify the best new products for roll-out combined with the most effective marketing/merchandising support to build awareness, generate trial and repeat purchasing to yield sustainable and profitable volume levels.

Strategies to Grow Store Brands:

• Expand the variety. Half of consumers said they are willing to buy more store brands if there is greater variety. Do your homework to assess opportunities among your core shoppers. Don’t introduce new lines or items at the expense of high penetration and/or high frequency brands, which can drive your shoppers to competitive retailers.
• Keep prices affordable. The majority of consumers are not willing to pay more for store brands. The same is true for brands, but an assessment of price level and price gaps between your store brands and brands can yield stronger sales and profits.
• Invest in quality. Value is important, but quality goes hand-in-hand. Consumers dissatisfied with quality will buy less. Store brands don’t need to be just about low prices; a tiered store brand approach can allow you to build sales among diverse shoppers.
• Build strong brand equity. About 40 percent of consumers claim to only trust store brands from retailers they have confidence in. Enhance your shopper connection with a strong store brand program.
• Connect with younger consumers. Younger generations are strongly committed to store brands and low prices. Not only do they view them as good alternatives to name brands, but almost half (42%) said that some store brands are higher quality. These shoppers are also more engaged in online information seeking, so look for opportunities to connect with them via digital communication vehicles.
• Reach older consumers. The “Greatest Generation” leads the way in believing store brands are “extremely good value for money”. This group is a prime segment for trial programs. Leverage in-store sampling programs, money-back guarantees, and communications through your paper circulars.
• Appeal to lower-income consumers. Necessitated by a need to stretch dollars further, lower-income consumers have a stronger commitment to store brands. These shoppers are also less inclined to believe that store brands should always include a retailer’s name on store brand products. Have some fun naming your store brand items.
• Understand Hispanic consumers. Hispanics place great importance on getting the best price and say they will buy more store brands provided there is more variety available. Based on population projections, Hispanic households will represent the single biggest growth opportunity for years to come; now is the time to make an investment to understand how your store brands connect with Hispanics.
• Broaden appeal for African American and Asian consumers. African American and Asian consumers are very committed to brands, so look for opportunities to co-promote the right combination of branded and store brand items and be careful not to invade a branded space with a store brand offering and turn away shoppers.

Grandparents are a family’s greatest treasure. They enrich the lives of their grandchildren with traditions, stories, home-cooked meals and unconditional love. For many, their greatest joy is to lavish with love and spoil with splendor. And considering grandparents represent a sizable target (69.6 million according to Grandparents.com), which will continue to grow another 11 percent between now and 2015, retailers and manufacturers would be wise to tap into the “multiplier effect” they represent.

Doting Dollars
Nielsen’s research reveals that grandparent households spend 4.4 percent more per year than all other households, which equates to an extra spend of more than $300 a year. Interestingly, having multiple grandchildren does not translate to more spending. In fact, grandparents in the survey with only one grandchild actually spend two times more than grandparents with 2–10 grandkids. The exception is grandparents with more than 10 grandkids – they actually spend $79 less per year than non-grandparent households.

Grandparents with one grandchild are likely younger and still working and may be more inclined to show their love with greater spending. Similarly, households with more grandkids are likely to be older and therefore have weaker spending power.

Fully 39 percent of grandparents in the Nielsen survey provide some kind of support to help their grandchildren. Nearly one in four (23%) buy clothing for their grandkids and one in five purchase food and beverages. Mom and dad benefit too, as grandparents help out with household and personal care purchases (16%), education expenses (10%), daycare costs (8%) and medical care/doctor visits (5%).

Retail Therapy
With more free time on their hands, grandparents shop more frequently than the average consumer on an all-outlet basis, but where they shop and what buy might come as a surprise considering the status of their empty-nest household. This is especially true for grandparents with just one grandchild who over index considerably for spending on toys and sporting goods, and all things baby: baby food, disposable diapers and other basic necessities. And, of course, no grandparent can resist showing off their beautiful grandchildren with a brag book full of photos.

Grandparent households spend more than average in a number of retail channels – especially those with greater gift-giving options. Supercenters, warehouse club outlets, dollar stores and convenience/gas chains all over index compared to non-grandparent households. With fewer mouths to feed, it is no surprise that they spend less than average in the grocery channel.  However, Nielsen’s research also showed how grandparents who see their grandchildren daily or several times per week (one-third of those surveyed) are bigger spenders, suggesting opportunities for grocers to take advantage of those frequent visits.

Accessible and Connected
If you want to reach grandparents, television is a good bet. Older populations watch more television than their younger counterparts. During fourth quarter 2010, Persons 65+ viewed over 46 hours of live television on a weekly basis (by far the most of any group). They also played back more than 90 minutes of recorded programming each week (the lowest of any group). By comparison, Persons 35-44 viewed over 30 hours of live television and played back more than three hours of recorded programming (the most of any group). With most grandparents free from navigating work schedules and busy households, more time at home is driving some of this behavior.

If you think that older consumers aged 50+ are not digitally savvy, you are mistaken. In fact, in December 2010, Nielsen reports that consumers aged 50+ in the U.S. comprised roughly one-third (32%) of the active Internet audience on average taking into account usage at both home and work locations. And older consumers spent nearly 62 hours online in that month. Sending and receiving email is the most popular online activity, with 82 percent of grandparents finding this mode of communication fast and easy. Paying bills, checking the weather, printing maps and directions, reading the news, visiting social network sites, accessing personal health care information and playing online games are activities enjoyed by a surprisingly high number of older consumers.

Mobile phone usage, while significantly lower for consumers aged 65+ compared to the younger set, it is rapidly catching up. On a monthly basis, they made 104 calls, but only sent or received 41 text messages. Perhaps the hand dexterity of older consumers may contribute to the minimal usage of short message service capabilities – an opportunity for mobile providers to specially design phones for fingers that may not be so nimble anymore. The mobile behavior of the next generation of grandparents is clearly in the “texting” camp.

Redefining Old Age
Today’s older consumers are active, connected and big spenders. And while this segment represents a disproportionate share of marketplace consumption, they are often overlooked in marketing plans. There is a tremendous opportunity to dig deeper to understand what the older set watch and buy. Developing targeted programs designed around their varied needs and desires will prove beneficial for the savvy marketers that tap into these lucrative households.

Download Nielsen’s top 10s and trends in the U.S. for 2010.

It was the rare household that didn’t change spending habits over the last 18 months. Faced with unemployment (or even the prospect of it), higher expenses and crushing debts, consumers around the globe used a number of tactics to stretch their money further to get the most bang for the buck.

The Nielsen Company conducted an online survey in March 2010 of more than 27,000 consumers in 55 markets from Asia Pacific, Europe, Latin America, North America and the Middle East/Africa (consisting of countries from Saudi Arabia, Pakistan, United Arab Emirates, Egypt and South Africa) to get a better sense of the steps being taken to save money in view of uncertain economic conditions.

What’s more, while recovery has taken hold in some regions (Asia Pacific and Latin America in particular), in other regions it has been tentative. Regardless, one thing remains clear: habits picked up during the recession are likely to survive even after economic recovery is in full-swing.

Value Strategies Help Savvy Consumers Save
In addition to a shift toward private label products, global online survey respondents saved money on household expenses in a number of ways, including:

• Buying items on sale (a 57% global average)
• Using coupons (40%)
• Shopping at value retailers (37%), such as supercenters and dollar stores
• Purchasing value packs (35%)
• Shopping close to home/work (25%)
• Stocking up (22%)
• Switching to cheaper health and beauty products (18%)
• Purchasing smaller packs with a lower unit price (17%)

One in 10 consumers in the online study reported no belt-tightening practices in their household.

North Americans led the world in cost-cutting strategies and adopted a host of budget-shrinking tactics. Seven in ten respondents said they bought items on sale, which is 13% more than the global average. Both Asia Pacific (46%) and North American (59%) consumers indicated they presented coupons at a checkout, outstripping the 40% global average.

In the U.S. in particular, manufacturer coupon redemption hit record highs in 2009 after years of no growth or declining growth. Meanwhile, Canadians continued to shift spending to discount or value retailers—now accounting for over one-third of total grocery sales—as their neighbors to the south have done so over the past several years.  Whether prompted by high gas prices or environmental sensitivity, North American respondents were also the most likely to say they shop in stores close to home or the office.

Value packs and stock-up shopping trips were a popular option across regions, with consumers in Middle East/Africa/Pakistan and Europeans lagging slightly behind the global benchmark. Middle East/Africa/Pakistan consumers also had the lowest incidence of using coupons (11%), shopping on promotion (42%), patronizing value retailers (21%) or stocking up to save (12%). The use of coupons as a promotion tool is not a popular marketing method in the region. Additionally, the dearth of established retailers in the Middle East and Pakistan explains the low incidence of patronage.

Roughly one-quarter of Latin (23%) and North Americans (24%) said they sacrificed beauty at the budget altar by switching to cheaper health and beauty products. Asia Pacific and Middle East/Africa/Pakistan respondents were less likely than average to say they made such a switch to save money (15%).

Cash is King; Dining In Trend Heats Up
Consumers found other ways to cope with the cash crunch as well. While 19% of the regions admitted to using credit cards more often, North America at 10% and Europe at 11% were well off that global average pace. Further supporting the belt-tightening approach, 31% of North Americans and 30% of Latin Americans said they recorded less credit card utilization versus the prior year, while only 20% of Europeans did, despite a precarious economic picture.

Foregoing credit was just one consumer coping mechanism. Based on survey findings, restaurants in some countries must be hungry for clients, as more than half of survey respondents said they ate out of the home less often than the year before. The dine-in trend was particularly strong in Latin America, North America, Europe and the Middle East.

Roughly one-fourth of residents of Indonesia, China, the Philippines, Hong Kong and India indicated that they were eating out more often than usual. Asia Pacific as a whole showed a 5% higher rate for eating out than the global average.

Dining out cutbacks appear to correlate with private label purchase patterns, with five of the top 10 “dining out less often” countries also landing on the top 10 “purchased more private label” list: Greece, Ireland, Spain, Turkey and Portugal—countries that continue to face significant economic challenges even as other parts of the world resume growth.

Note about online survey methodology
While online survey methodology allows for tremendous scale and global reach, it provides the perspectives on the habits of existing Internet users, not total populations. Where noted, the Nielsen Global Online Survey data is supplemented with consumption data by market.

Shoppers around the world took many steps to stretch their budgets during the recession such as eating at home more frequently or cutting back on vacations.  While improving economies may prompt consumers to return to restaurants or take a vacation, one trend that looks likely to remain—and perhaps even grow—is the shift to private label goods.

A 2010 global online survey conducted by The Nielsen Company reveals that 60% of consumers across 55 countries from Asia Pacific, Europe, North America, Latin America and Middle East/Africa (consisting of countries from Saudi Arabia, Pakistan, United Arab Emirates, Egypt and South Africa), say they are stocking cupboards with more store brands as a result of the economic downturn. Across the regions, Latin America led the way at 66% and the Middle East/Africa/Pakistan area trailed at 51%.

The highest levels of private label purchase intent during the economic downturn were reported by consumers in Colombia, Spain, Portugal and Greece at 80%, 79%, 74% and 70% respectively, reflecting recessionary realities, depressed export activity and raging deficits. Meanwhile, the lowest reported drift toward private label came from consumers in Sweden (70%), Thailand (62%), Hong Kong (60%) and Denmark (59%) who indicated they did not purchase more store brands during the recession.

While econometric pressures are driving many value-oriented consumer shopping decisions, it is just one factor influencing private label purchasing. A strong push from retailers and improvements in both quality and selection are contributing factors. It should also be noted that not all private label categories are alike. Store brand share varies widely by category and they still represent the minority stake when compared to premium brands.

Store brand share is typically strongest in commodity categories like milk, fresh eggs, rice, edible oil, vinegar and sugar/substitutes or in those with little differentiation (first aid and wrapping materials). Store brand share is usually the lowest among categories where there is strong marketing support for top brands (e.g., candy, gum, beer) and those where a high-level of innovation occurs (e.g., detergents, deodorant, cosmetics).

Staying Power
Fully 88% of shoppers globally said they intend to keep buying private label even after the economy improves, suggesting that store brand quality has reached parity with national brands and delivers on consumer expectations. While Latin American and Middle East/Africa levels were slightly less than the global average at 83% and 79% respectively, the overwhelming majority still intended to pursue a value strategy.

Countries with the most value-conscious consumers on the private label dimension included Austria, Germany and Sweden, all registering a better than 95% intent to continue purchasing private label, while more than one-quarter of shoppers in the Ukraine (31%), Pakistan (28%), the United Arab Emirates (27%) and Venezuela (27%) had no intention to buy private label in the future.

The economic downturn prompted many consumers to try private label goods for the first time, and once they did so, they discovered that not only was the pricing right, but the quality of the goods met or exceeded expectations. Regardless of the pace of economic recovery, retailers continue to have a tremendous opportunity to convert shoppers to private label for the long term.

Regional Round-Up

Asia Pacific
In most Asian markets, private label is still relatively undeveloped with only Hong Kong having a share above 5% overall. There has been significant investment by many leading retail chains into launching new private label products over the last five years and they are gaining acceptance particularly in the basic commodity categories. In these categories, such as cooking oil, rice, bathroom tissue, market shares can reach up to between 20% and 30% in some countries.

Asian consumers are still largely brand loyal and retailers will need to increase their private label marketing support to build consumer trust in their own brands. During the economic downturn in 2009, there was strong private label growth in many countries. For example, in Thailand, private label grew by over 25%, as shoppers increasingly looked for value when buying grocery products.

In the Pacific markets of Australia and New Zealand, private label is much more established with the majority of households regularly purchasing private label products, which account for up to one-quarter of all supermarket sales.

Latin America
Private label continues to have a stable presence in the region. In Chile, store brands represent 8.4% of the market as of April 2010. Market share remained relatively flat in Argentina and Mexico, reporting shares of 7.6% and 6.6% respectively during the rolling year ending April 2010. While Mexico’s private label market share was flat, sales grew 23% compared with the previous period (April 2009). Store brands in Brazil have 4.9% of importance (YTD April 2010).

The categories where private label market share are strongest varies dramatically by country. In Argentina, the top five categories are dominated by foods such as fish, pasta, ice cream and vegetables, while in Chile, four out of the top five are non-food categories (clothes hooks, candles, pots/pans and cotton swabs). In Mexico, sugar and pies hold the greatest market share, but disposable plates, glasses and place settings round out the top five.

Europe
Private label continues to show solid performance in most European nations, with Switzerland, the United Kingdom and Germany leading the way reporting 2009 store brand value shares of 46%, 43% and 32% respectively. While year-over-year growth was relatively flat or minimal, Turkey and Spain boasted the biggest year-over-year increases of 2.7% and 2.5% respectively.

North America
Private label has taken off in the U.S. For year ending July 2010, store brand unit sales reached an average 22% share across all departments, with share gains in all but dairy. Store brand unit shares range from a high of 40% in the dairy department to a low of less than 1% in alcoholic beverages.

In Canada, private label represented $11.4 billion in national sales for year ending July 2010, which is 18.3% of overall consumer packaged goods spend. Over the past year, private label share has declined slightly with overall dollar sales flat, while the total market increased +3%.

Middle East
Middle Eastern consumption patterns often run counter to the West for a variety of reasons, and respondents in the region indicated the least likelihood of purchasing private label today or after economic recovery. However, as awareness has increased over the last few years, volume is growing—albeit from a very small base. While only 18% of shoppers in the United Arab Emirates perceive private label as a better value for the money, certain categories such as household cleaners are regarded more favorably. Fully, one-fourth (26%) of shoppers in Saudi Arabia consider these store brands as worthy.

Note about online survey methodology
While online survey methodology allows for tremendous scale and global reach, it provides the perspectives on the habits of existing Internet users, not total populations. Where noted, the Nielsen Global Online Survey data is supplemented with measurement of private label consumption by market.

Residents in the San Francisco metro area were the most likely to participate in such programs – not much of a surprise given the region’s long-time reputation for being among the most environmentally conscientious areas in the country.  More surprising might be the second and third ranked metro areas of Los Angeles and the Washington, DC.

Nielsen works with a number of utilities around the U.S. to help them evaluate such programs.  One such client is Oregon’s Portland General Electric (PGE), which has been recognized as having one of the most successful residential programs of its kind. While the Portland DMA falls just outside of the Top 10 market potential report above, PGE’s customers have enthusiastically adopted this program, and participation levels are approximately three times the national average for residential renewable energy programs. With 73,000 renewable power customers, PGE is constantly evaluating customer “touch-points” to make enrollment into renewable programs easy.

“Embracing renewable power is one of the easiest ways for customers to reduce their carbon footprint,” said Thor Hinckley, Manager of PGE Renewable Power Program.  “We have to thank our more than 73,000 renewable power customers who have made PGE’s renewable power program one of the nation’s most successful. For the past four years, PGE residential customers have purchased more renewable power than from any other utility in the nation.”

“As PGE has shown, there is greater market potential out there for renewable energy support from the U.S. consumer than has been tapped. Understanding which households and consumers embrace renewable energy will continue to be a driving factor in the success of these types of programs nationwide,” said Jonathan Drost, Account Executive, Nielsen Claritas.

The Nielsen Energy Audit is an annual survey of more than 32,000 respondents conducted online to track changes in the energy sector and its impact on consumer behaviors. This survey was conducted in June 2009.

For years, Nielsen has been refining and expanding its online tools that enable clients to put actionable context behind conversations about their brand. As “brand listening” on the web has now become standard practice, it’s time to go deeper to unlock the value, passion and insight hidden inside the everyday chatter happening outside the context of your brand. As social media usage and time spent on these sites grows globally, the need for this deep social listening, with the proper approach and analysis, is more important than ever.

In a recent webinar, The Power of Listening: How KRAFT Leverages Social Media Insights for New Product Development, I hosted with Paul Banas of Kraft Foods, we examined how Nielsen’s social listening frameworks could provide valuable dimension and feedback for Kraft’s potential entry into the burger or mini-burger market. Kraft knows the cheese part of cheeseburger better than anyone, but what could social listening tell them about product trends, emerging flavors and consumer profiles?

Beyond Brand
When we talk about food online, we see that maybe 10% of conversations mention brands specifically, while the rest focus on passionate likes and dislikes, chatter about daily routines and more.

But where to start?
Listening to the entire web to get new product ideas is a bit like boiling the ocean. This is why building a listening framework around themes is key. For example, we could focus in on themes like health and wellness, sustainability, and even an occasion like getting out of the house in the morning. From there we can map those themes, look for trends over time, find intersections and conversation drivers across different segments. Then, it’s onto a deep dive of that information blending search trends and offline data among other tactics.

It’s also important to build a framework around audience types. Kraft knows that moms talk about food differently than food aficionados, dieters or those big on entertaining at home. Understanding who is providing feedback, where they are commenting and even what time of day helps put their passions and preferences in the proper context.

Understanding the Situational Context

Lifestyle personas of at-home burger eaters

Results of the Deep Dive
When Kraft focused in on conversations specifically around “sliders” or mini burgers, they found some common themes and “Positive Triggers” across audiences to help focus their thinking.

• Sharability: Social networking helped highlight the fact that sliders are themselves social and are a food that is rarely consumed alone. They are more likely to be enjoyed at a social function, a happy hour or events.
• Kids Love ‘Em: Parents of picky eaters found it a fun dinner option and could make an activity out preparation with their children.
• Multiple Meal Satisfier: Sliders can be consumed as an appetizer, snack or light dinner. Its value as a late-night junk-food fix among students was also a factor.

The Value of Social Listening
While both Paul and I agree that social listening is not a full replacement for traditional focus groups, surveys or “ask-based” research, social listening is vital to understanding the passion of consumer sentiment online. Listening vs. Asking provides a powerful complement with the potential to increase the depth, speed and even the affordability of large-scale customer research.

• Listen to the full webinar: The Power of Listening: How KRAFT Leverages Social Media Insights for New Product Development

Todd Hale, Senior Vice President, Consumer & Shopper Insights &
Dan Brady, Director, Insights Consulting, The Nielsen Company

SUMMARY: A consistent pattern of reduced shopping trips continues to be a major element of consumer’s economic coping strategies. In the latest battle for share of wallet, those retailers who satisfy consumers through differentiation will gain more of less.

The recession continues its ravaging effect on retailers. According to Nielsen, the downward trend of consumers shopping less hit a new low in February 2010, reporting a 4% year-over-year decline in monthly all-outlet shopping trips. And while per trip shopping basket rings began to pick up during and after the holidays, February remained static with a 1% increase compared to last year. Retailers’ focus on store brands and retail price cuts helped keep spending levels in check driving more value for shoppers.

A closer look at monthly shopping trips shows that trends have virtually flat-lined in total and across all major retail channels. Grocery stores have been shopped two plus times more often than competitive retail channels. Other Nielsen trends show that consumers are not shopping more stores looking for deals as consumers consistently shopped fewer retailers each period in 2009 than they did in 2008. It is a tough market and breathing life into a different retail environment will take new strategies that keep shoppers satisfied and spending while they are in the store.

Food Matters
As consumers are eating in more and out less, retailers are converting lost restaurant trips into grocery trips. And while grocery trips were up in the last eight of twelve periods ending February 2010, trips in the last four months are down. Value channels such as dollar stores, warehouse clubs and supercenters have fared the best showing growth in most periods in the last year and one-half. In fact, only supercenters and club stores had positive trip growth in each period in 2009. Both, however, declined slightly in 2010 as consumer confidence remained low and poor weather conditions plagued major population centers.

Continuing to take a hit are drug, convenience and regular mass merchandiser formats, although drug trips are showing signs of improvement as consumers stock up on meds to combat the effects of the cold and flu season.

Shopping trips to discretionary retailers such as toy, electronic, department, liquor and home improvement stores continue to feel the economic pinch. Electronic, toy and department stores have been hit especially hard, with year-over-year shopping trip declines in the latest four-week period ending February 2010 of 33%, 18% and 7% respectively.

Do More With Less
With less store traffic, retailers need to capitalize on consumers’ time in the store like never before. Three priorities should top the list for every retailer:

1. Satisfy loyal shoppers with savings linked to shopping frequency and spending levels.
2. Entice new shoppers with promotional offers such as a free reusable shopping bag or product.
3. Offer value and low prices, but more important, stake a claim to at least one or two points of differentiation to maintain a competitive advantage.

Part 1 of 5 on Healthy Eating Trends and Myths

Tom Pirovano, Director of Industry Insights
Consumers in the U.S. might be trimming the fat from their budgets and diets, but contrary to predictions, they continue to demonstrate a healthy appetite for foods featuring health and wellness claims. From alpha (antioxidants) to omega (omega 3 fatty acids), foods touting the kind of heart-healthy, joint-buffering, free radical-extinguishing properties that appeal to aging Baby Boomers dominate the rapid growth list.

The big winners on the healthy eating front, each posting double digit growth, were products with label claims for omega, high fructose corn syrup free, antioxidants, gluten-free, probiotic, calcium, fiber and low glycemic and no salt/sodium added.

Still champions
Many longstanding health claims maintained their popularity even as upstart health and wellness claims debuted on the healthy eating scene. Chief among them: products with fat claims—generating 2009 sales of $46.1 billion—slid a modest 3% vs. 2008 results. This dip was attributable in large part to milk, which contributes $11.5 billion to all fat-claim product sales. Even though milk unit sales remained relatively flat (-0.5%), lower prices dried up milk dollar sales, which ended the year down 16.7%.

Other popular claims holding their own included products labeled “natural,” with $22.8 billion in annual sales representing 4% growth vs. 2008. The natural claim demonstrated real star power, outselling organics by more than a 4:1 margin in food, drug and mass merchandise retailers. Sodium claims—a $14.9 billion category dominated by soda products—kept its effervescence, recording no change in dollar sales over the last 12 months.

The “better-for-you” health movement to reduce saturated and trans fats resulted in a slender 1% uptick in products with an absence of a specific fat label claim—a $14.8 billion category. Products with a preservative claim still resonated with shoppers, resulting in a 1% sales gain to $14.5 billion. And that perennial favorite claim of “reduced calories” sold $11.7 billion in 2009, up 6% as consumers pursued the elusive goal of weight loss.

Losing favor
“Lowers cholesterol”—one of the established knockouts among widespread health claims—lost ground in 2009. Dollar sales for all products featuring cholesterol claims dropped 5% to $10.6 billion. The uptick in effective statin drugs used to lower cholesterol may be a primary contributor to the decline in popularity—a trend to watch. If an equally effective weight-loss drug is ever developed, it may have a similar impact on “low-fat,” low calorie and sugar-free products.

Hormone/antibiotic-free food claims—a $2.2 billion category—declined 2%, but with milk representing the largest contributor of hormone-free products, this finding is more a reflection of milk pricing than a shift in consumer preference. The low-carb movement was put on a diet, with sales dropping 5% in the $1.8 billion category as the popularity of the Atkins Diet continues to wane. And soy claim popularity dipped in both traditional food/drug/mass merchandise outlets (down 6% per Nielsen) and natural food channels (down 4.1% per SPINS).

Other claims that failed to gain traction included products with flax or hemp seed—a comparatively small category generating only $137million in traditional channels—showing a sales decline of 8%.

The pattern was reversed in the natural food channel, where flax seed sprouted a 1.2% sales increase and hemp products roped in 9.0% more sales than the prior year, according to SPINS. Although sales trends in the natural food channel may differ from mainstream retail channels, natural outlets may help marketers identify the newest trends in healthy eating. One such trend is Stevia, which has recently found its way onto the food/drug/mass sweetener aisle and into major brands. Can Kombucha—a fermented beverage made of tea and bacteria cultures—(up 18% / $6.7 million) in natural food stores be far behind?

Healthy impact
Savvy marketers understand that being part of a healthy lifestyle solution reflects positively on almost any brand—or retailer. Retailers can further leverage and deepen their relationship with shoppers through programs ranging from Wii Fit exhibitions on-site to light cooking demonstrations and product tastings. With no shortage of news stories on child obesity, families will continue to seek out brands and retailers offering healthy alternatives.

Healthy Eating Trends

• Part 1: Commitment Trumps the Economic Pinch
• Part 2: Organic Enthusiasts Remain Loyal
• Part 3: Eating Healthy Doesn’t Have To Cost More
• Part 4: Store Brands Expand Healthy Offerings
• Part 5: Healthy Eating Index Debuts