“The poor weather resulted in shoppers making fewer shopping trips this year.  But with grocers increasing promotional activity, with 33 percent of sales this month being on promotion, we expect monthly growth going forward to be in the 4 to 5 percent range as food inflation continues to slow,” said Mike Watkins, Senior Manager, Retailer Services at Nielsen.

Of the top 9 grocers, Waitrose continued to perform well with double digit growth of 10.5 percent for the quarter and more than 11 percent in the last four weeks.  Asda, Sainsbury’s and Morrisons continue to grow at the expense of smaller retailers, while Tesco has launched a new customer loyalty scheme to intensify the battle for shoppers.

“With shopper promiscuity increasing and loyalty levels falling over the longer term, the added benefits of Tesco’s Club Card 2 may do the trick in keeping Tesco customers loyal to the shop and ultimately spending more of their money there,” said Watkins.

“Shoppers continue to respond to offers, with another all-time high for promotional spend at 33 percent of fast moving consumer goods spend in the last four weeks.  As a result, all retailers are attracting new shoppers, but their loyalty and commitment are likely to be lower,” said Mike Watkins, Senior Manager, Retailer Services at Nielsen.

Sainsbury shoppers increased the frequency of their visits by 6 percent in the last four weeks, while ASDA showed strong growth in grocery and general merchandise. 

“The recent wet weather, combined with the start of the school holiday could make the level of improvement short-lived.  However, last year was a washout both in terms of weather and sales, so we are still likely to see good year-on-year improvements from food retailers over the rest of the summer,” said Watkins.

“Waitrose has gained strong momentum going into the summer, which is the time of year that brings incremental sales of fresh foods.  With new stores opening and a major media campaign in early June to support the launch of the retailer’s new private label offerings, the outlook, based on recent performance, is positive,” said Mike Watkins, Senior Manager, Retailer Services at Nielsen.

“With a record of 32 percent of all sales being goods on offer in the four weeks to May 2009, retailers recognize that they need to show good value for money as a fundamental shift in consumer behavior has taken place over the past few months.  At face value, this will be good news for Asda, Tesco and the other discounters, but it is also an opportunity for all other retailers to get a bigger share of wallet of the recession-struck shopper,” said Mike Watkins, Senior Manager, Retailer Services at Nielsen.

% Share of Grocery market Spend, 12 Weeks Ending May 16, 2009

• First, change the focus from toys (their products) to families with young kids (their customers). I’ve often said that the best retailers define themselves not by the products they sell, but by the shoppers they sell to.
• Create a section reserved for birthday parties (who doesn’t enjoy a pit of colored balls?). We spend a fortune on these types of parties for our kids.
• Hire more moms willing to work from 9:30 am to 2:30 pm. Thousands of well-educated moms would sacrifice big salaries to work around their kids’ school schedules.
• Connect with Hispanic families. Nielsen’s Homescan panel consistently shows how Hispanic Americans index highest with baby-oriented products like baby food and diapers.
• Continue to expand food sections with private label supplied by supermarkets. Supermarkets bend over backward to attract young families. Why not introduce a grocer’s brand to shoppers in a completely separate retail channel?
• Offer in-store focus groups for marketers trying to reach kids and moms. Each store has the potential to become a laboratory for understanding how kids and their parents shop, play, and interact with products.
• Conduct midnight release events for DVDs, video games, books, (and new toys?) Toys “R” Us is a player in each of these categories. Book stores and electronics stores do a great job of creating excitement around midnight releases. This could also be a way to attract a new shopper demographic.
• How about… Movie Night at Toys “R” Us?
• Whole Foods has done a great job of developing their brand around healthy living. By co-branding with Toys “R” Us, they have the opportunity to reach new shoppers while Toys “R” Us can benefit from products (not just food) focused on healthy eating, exercise, and environmental sustainability.
• Get vendors to sponsor video game tournaments with gift cards as prizes for winners.
• Offer In-Store pediatrician clinics. Alright, this may be a stretch, but if Walgreens can be successful with their Take Care clinics, why not Toys “R” Us with a specialist focused on kids?
• Offer In-Store Seminar Events for parents on college savings, healthy babies, child-proofing, and have local supermarkets sponsor healthy eating demonstrations.
• Book Signings from children’s book authors.

Feedback? tom.pirovano@nielsen.com

The beginning of the year brought some surprising good news for retailers: retail sales (excluding automotive) rebounded in January and February.  While the figures were not earth-shattering – sales grew 1 percent and January and 0.7 percent in February – they were significant improvements on the last four months of 2008, where declines ranged from 1.2 percent to 3.1 percent.

Using data collected by the Nielsen Homescan Consumer Panel, we saw improved trip performance in the first two months of the year in most channels.  Exceptions were drug stores, which were affected by a weak flu season, department and toy stores.

[click to view full graphic]

While we expect that March will be weak, due primarily to Easter falling later this year, signs seem to be indicating that we may be near a bottom of the economic downturn.  Data from the second quarter will be critical in determining whether renewed growth is on the horizon, or if we are in store for several more months of decline.

The overall state of the economy has dropped consumer confidence to historically low levels and caused consumers to continue to reduce driving. To deal with gas prices, consumer claims in the areas of combining shopping trips and eating and entertaining at home more often are at level higher than measured when gas prices were at $4 plus.  According to the most recent Nielsen Homescan Gas Impact Study, taken in December 2008, 77 percent of respondents said that they were combining shopping trips and errands to save gas.  57 percent said that they are eating out less, an increase of 5 points since the last survey in June and July of 2008, and 50 percent are staying home more often.  And 64 percent of U.S. consumers are reducing spending, up 1 point since the June/July survey.

To reduce spending, consumers are increasingly looking to use more coupons, switch to private label or less expensive brands, shop more at Supercenters and purchase larger, economy size portions.

“The fact is that even though gas prices have declined to ‘normal’ levels, prices of other goods have increased.  The weak economy – and the nervousness it has caused most Americans – has shifted consumer behavior in ways not seen before.  However, winning manufacturers and retailers will be those who take advantage of the increased time consumers are spending at home and use the right advertising and promotions to capture shopping trips and item purchases,” said Todd Hale, senior vice president of Consumer & Shopper Insights at Nielsen.

To view a PDF of the complete presentation, click here.

The next Nielsen Gas Price Impact Survey will be conducted in June 2009.

Dollar sales of hair preparations such as gels, pomade and waxes slowed but continued four years of strong growth.  In 2008, dollar sales were up a modest 1.8 percent after growing 13.5 percent in 2007, 13.4 percent in 2006 and 7.7 percent in 2005.

Sales of men’s hair spray continued to collapse: they fell 7 percent in dollars to $14.1 million and a decline of 7.2 percent in unit volume.

This report was originally featured in the January issue of Facts, Figures & the Future, a monthly e-publication focused on delivering the latest consumer data and trend information to members of the Food Marketing Institute and clients of Nielsen. Facts, Figures & the Future is published by The Lempert Report/Consumer Insight, Inc. and is sponsored by the Food Marketing Institute and Nielsen.

These households also outspent average households by 88% on purchases of ice, and by 75%, 72%, and 64%, respectively, on purchases of baby food, baby needs, and disposable diapers.

Acculturated Hispanic-American households — those that speak at least some English at home – account for 10.8% of all U.S. households.  These households represented 20.5% of dried vegetables and grains product dollar sales and 20.3% of ice product dollar sales.  Hispanic-American households also accounted for 18.9% of baby food product dollar sales, 18.6% of baby needs product dollar sales, and 17.7% of disposable diapers product dollar sales.

Other categories skewing to Hispanic-American households include hair care, family planning, women’s fragrances, grooming aids, and juices and drinks.

Nielsen’s Marketing Tip:
Retailers targeting Hispanic-American households may want to promote these categories (above) with feature ads, displays, and product assortments. Manufacturers should consider cross-promoting and cross-couponing items in these categories.

Nielsen’s Dollar Volume Index identifies demographic groups that account for above or below average dollar volume purchases for a given product category.

Data for the index was collected via Nielsen’s Homescan consumer panel, a nationally representative sample of U.S. households that provides a stratified, proportionate, non-biased representation of the U.S. population. Homescan panelists scan all of their UPC coded purchases after every shopping trip, allowing Nielsen to capture their complete shopping and buying behavior.

Read coverage of Nielsen’s findings in Brandweek and Food Product Design.

Households with baby boomer members — born between 1946 and 1964 – account for nearly $230 billion in sales of consumer packaged goods (CPG) products and represent 55% of total CPG sales, a new study by Nielsen and Hallmark Channel reports.

The research, which examined the CPG spending power and brand loyalty of baby boomer households, found that baby boomer households’ share of sales is 5 points higher than their share of population, according to Nielsen and Hallmark. 

Nielsen and Hallmark also tracked baby boomer purchases of over 6,500 brands measured by Nielsen’s Homescan consumer panel that have over 1% US penetration.  Of these brands, Baby boomers account for over 50% of sales for 72% of those brands.

The research for Nielsen and Hallmark’s joint study was conducted via the NielsenConnections Brand Target Audience products, which combine Nielsen’s Homescan consumer panel with Nielsen’s national television sample and its Nielsen Online Internet sample.

Hallmark Channel is the first cable television network to license the NielsenConnections Brand Target Audience products.

View the full press release.

Read coverage of Nielsen’s findings in Multichannel News and Ad Age.