Consumers Continue to Demand Value at Retail Level

CHICAGOValue will remain at the core of consumer shopping strategies for months to come, and retailers and manufacturers who can be flexible and nimble in light of shifting strategies will succeed in winning not only consumer loyalty, but also share of the basket, according to SymphonyIRIs latest Times & Trends report The CPG Basket: Fostering Growth in a Time of Conservation."

The report examines the current and emerging trends of the four predominant trip missionsquick trip, special purpose, fill-in and pantry stock-up--that CPG marketers can leverage to provide the low-cost, high-value solutions needed by todays cash-strapped consumers.

Average basket ring across and within trip missions has been a moving target during the course of the past two years and is being influenced by changing consumer rituals and vacillating pricing trends. Quick trip and special purpose basket size grew only slightly, while pantry stock-up baskets and fill-in baskets began declining in 2009 and eventually began increasing in early 2011. Baskets within these missions have been growing at an increasing rate in 2011; however, the rate of increase remains below the level of inflation and reflects extremely conservative shopping behaviors.

For CPG marketers, the difficulty is that no one size fits all budgetary ritual exists," said Susan Viamari, editor of Times & Trends, SymphonyIRI. Rather, strategies vary by channel, category, brand, market and even at the household level. Shoppers are no longer strolling aisles making casual, spontaneous purchases. Quick trip missions are more prevalent across a majority of channels and income segments. And, when shoppers do stock their pantries, it is a premeditated shopping trip with lists in hand."

Within grocery, mass/supercenter and club channels, the predominant trip mission is the pantry stock-up mission, which accounts for 50% of sales in grocery and one-third of sales in both mass/supercenter and club channels. Pantry stock-ups account for 15% to 20% of trips. Pantry stock-up missions took a hit during the economic downturn and have been replaced by more quick trips and, to a lesser degree, fill-in trips.

Quick trips are a strength of the drug and dollar channels and are driven by "need it now" purchases. Their nearby locales make it convenient to swing by for a few quick items without a significant time or gas outlay. Retailers in both of these channels are shifting their models to capture an increasing share of consumer spending. For instance, Dollar General has been focused on updating the assortment and layout of Dollar General Market, a hybrid grocery/dollar store format that contains limited perishables and a value-focused grocery selection. Meanwhile, CVS and Walgreens are adjusting their drug store formats to include more consumables, particularly in urban areas of the country.

Non-essential spending has been placed by the wayside in favor of controlled spending," said John McIndoe, senior vice president, Marketing, SymphonyIRI. Clearly, value is the carrot for today's shopper. And, with the rocky road to recovery spreading into the horizon, value will remain at the core of consumer shopping strategies for months to come. Retailers and manufacturers who can be flexible and nimble in light of these shifting strategies are those who can best succeed in winning not only consumer loyalty, but also share of the basket."