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Starting to see a modest recovery in key economic indicators - PowerPoint PPT Presentation


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Center Store Consumer Insights. Our Consumers & Shoppers. Our Consumers & Shoppers. How the Landscape is Evolving Economic Conditions Changes in Shopper Behavior Channel Trends Continuing Behaviors Consumer “Value” Revisited Implications. Negative. Positive. Neutral.

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Center Store

Consumer Insights

Our Consumers & Shoppers


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Our Consumers & Shoppers

  • How the Landscape is Evolving

    • Economic Conditions

    • Changes in Shopper Behavior

      • Channel Trends

    • Continuing Behaviors

  • Consumer “Value” Revisited

  • Implications


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Negative

Positive

Neutral

Starting to see a modest recovery in key economic indicators

Economic Conditions

Sources: U.S Leading Economic Indicators


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Economic Conditions

  • Unemployment remains high, yet jobs increased significantly in March 2010

  • 16% of shoppers are worried about their job security, down from 20% a year ago2

U.S. Jobs Lost or Gained

10%

Unemployment Rate

Source: Seasonally Adjusted U.S. Total Non Farm Employment, U.S. Government; 2. Shopper Loyalty Card Data from Leading National Retailer 2010


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2004

2006

2008

2009

2010

2002

2003

2005

2007

2001

Economic Conditions

  • Consumer confidence has improved recently

The Conference Board - Nine census regions, 5,000 US households; 1985 = 100



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Spending on Indulgences

50%

45%

40%

35%

30%

% of consumers

25%

20%

Cutting holidays abroad

15%

Cutting car purchase

10%

Buying higher quality premium food and beverages

5%

Increasing or maintaining spending on “staycations”

0%

June

July

August

September

October

November

December

Changes in Shopper Behavior

  • Shoppers increase their hesitancy with big expenses, but continue to indulge in food and beverage

Source: Data Monitor “Recovery from Recession” March 2010


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Changes in Shopper Behavior

  • Shoppers began spending more in late 2009

    • Personal savings dropped to 3.1% in February 2010 from almost 5% a year ago2

Total Retail Sales ex Auto

% Change vs. Prior Year

Source: Dept of Commerce - Total Retail Sales exc. Auto; 2. Bureau of Economic Analysis


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Changes in Shopper Behavior

  • Shopping trips increased in 2009

Average Shopping Trips per Household

All Outlet % Change vs. Prior Year

Source: IRI Consumer Network; 52 weeks ending 12/27/2009 and same period prior years


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Shopper Trips

Dollar Sales per Trip

Unit Sales per Trip

Changes in Shopper Behavior

  • Shoppers making less trips to Center Store Grocery, but increasing units purchased per trip

Source: IRI April 2010 Total U.S. All Outlets, Total Edible Grocery


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Changes in Shopper Behavior

  • Commissary shoppers are increasing their trips, and have significantly higher spend per trip than Grocery Channel shoppers

Item Trips per Buyer

Item $ per Trip

+1%

+0%

+1%

+3%

Source: Nielsen Homescan


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Changes in Shopper Behavior

  • Commissary growth outpaced Grocery during recession onset,but slowed during 2009

+3%

+3%

+12%

+2%

+5%

+5%

Source: Nielsen Homescan


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Changes in Shopper Behavior

  • Outside the gate, consumers are increasing their purchases

Source: Nielsen RMS March 2010


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4%

Redemption Growth

4%

6%

20%

12%

12%

16%

20%

71%

65%

26%

20%

0%

100%

Changes in Shopper Behavior

  • Coupon redemption grew 27% in 2009 across all channels

Share of Redemption

Military

Convenience

Pharmacy

Dollar

Mass/SC

Grocery

Source: Nielsen April2010



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Continuing Behaviors

  • Shoppers’ quest for bargain hunting is beginning to slow, but is still strong

Shopping Behaviors

% of Shoppers Participating in Activity

Source: IRI 2010 FMI Economic Survey; Americanism Study: IRI Economic Trend Database, IRI AttitudeLink Survey of 1,067 Consumers


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Continuing Behaviors

  • Pre-planning has become more important to shoppers

Where Purchase Decisions Are Made

% of Shoppers

Source: Longitudinal Economic Study Series, IRI AttitudeLink, n=1,000 + shoppers


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Continuing Behaviors

  • 64% of shoppers work from a pre-made list

    • Of those shoppers, store flyers are key in list-making preparation

List Making Behaviors

Source: IRI April 2010


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Continuing Behaviors

  • 66% of shoppers admit to varying from their list

Reason for Impulse Purchases Away From Lists


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Continuing Behaviors

  • Home meals at highest level since 1993

# Annual Meals Prepared & Consumed In-Home per Person

Source: The NPD Group



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Consumer Value: Revisited

  • Food price inflation in 2009 was only 0.5% for food-at-home, but 3.5% for food-away-from home2

Reasons for Preparing Meals at Home

Source: The NPD Group; 2. Economic Resource Service, Food Business News March 2010


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Brand value remains important to shoppers, especially pre-store decisions

Consumer Value: Revisited

What is important to you in making a decision on brand? % of Shoppers

IN-STORE FACTOR

PRE-STORE FACTOR

Source: Longitudinal Economic Study Series, IRI AttitudeLink, n= 1000+ Shoppers


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Consumer Value: Revisited pre-store decisions

  • For consumers, “Value” continues to be much more than a price point

    • Value assessments are complex & ever changing

    • Value is perceived as all that a brand or product has to offer – and weighed in context of a price point and a host of alternative choices

Mom: “It’s what I get for what I pay”

Source: The J.M. Smucker Company


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Consumer Value: Revisited pre-store decisions

30%

12%

18%

18%

23%

25

Source: The J.M. Smucker Company


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Consumer Value: Revisited pre-store decisions

Brand & Quality Lovers

  • Quality is paramount in purchase decisions

  • Rely on brand names to deliver quality

  • Willing to pay a premium for certain benefits, like health & wellness

30%

12%

18%

18%

23%

26

Source: The J.M. Smucker Company


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Consumer Value: Revisited pre-store decisions

Brand & Quality Lovers

  • Quality is paramount in purchase decisions

  • Rely on brand names to deliver quality

  • Willing to pay a premium for certain benefits, like health & wellness

Quality Savvy

  • Focus their purchase decisions on fewer, yet high quality products

  • Not driven by price or sales

  • Reduce overall buying and make thoughtful decisions to ensure they can afford the high quality items they like

30%

12%

18%

18%

23%

27

Source: The J.M. Smucker Company


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Consumer Value: Revisited pre-store decisions

Brand & Quality Lovers

  • Quality is paramount in purchase decisions

  • Rely on brand names to deliver quality

  • Willing to pay a premium for certain benefits, like health & wellness

Quality Savvy

  • Focus their purchase decisions on fewer, yet high quality products

  • Not driven by price or sales

  • Reduce overall buying and make thoughtful decisions to ensure they can afford the high quality items they like

30%

12%

18%

18%

23%

Family Values

  • These Moms are smart shoppers who look for good prices & deals, but they do not buy on price alone

  • Generally less willing to pay a premium for convenience, preferring to “do-it-myself” 

28

Source: The J.M. Smucker Company


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Consumer Value: Revisited pre-store decisions

Brand & Quality Lovers

  • Quality is paramount in purchase decisions

  • Rely on brand names to deliver quality

  • Willing to pay a premium for certain benefits, like health & wellness

Quality Savvy

  • Focus their purchase decisions on fewer, yet high quality products

  • Not driven by price or sales

  • Reduce overall buying and make thoughtful decisions to ensure they can afford the high quality items they like

30%

12%

18%

18%

23%

Family Values

Drifters

  • These Moms are smart shoppers who look for good prices & deals, but they do not buy on price alone

  • Generally less willing to pay a premium for convenience, preferring to “do-it-myself” 

  • No overarching value philosophy with respect to grocery purchasing

  • Neither strongly price-oriented, nor quality-driven

  • Still appreciate deals, some aspects of value, some convenience elements, and small indulgences, but not overly so

29

Source: The J.M. Smucker Company


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Consumer Value: Revisited pre-store decisions

Brand & Quality Lovers

  • Quality is paramount in purchase decisions

  • Rely on brand names to deliver quality

  • Willing to pay a premium for certain benefits, like health & wellness

Price Dependents

  • Very price conscious

  • Hunt for bargains in order to get by from paycheck-to-paycheck

  • Need to stretch every dollar and will do whatever it takes to find the best price

  • Brands are not very important, since price trumps all else

Quality Savvy

  • Focus their purchase decisions on fewer, yet high quality products

  • Not driven by price or sales

  • Reduce overall buying and make thoughtful decisions to ensure they can afford the high quality items they like

30%

12%

18%

18%

23%

Family Values

Drifters

  • These Moms are smart shoppers who look for good prices & deals, but they do not buy on price alone

  • Generally less willing to pay a premium for convenience, preferring to “do-it-myself” 

  • No overarching value philosophy with respect to grocery purchasing

  • Neither strongly price-oriented, nor quality-driven

  • Still appreciate deals, some aspects of value, some convenience elements, and small indulgences, but not overly so

30

Source: The J.M. Smucker Company


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Implications pre-store decisions

  • Worst of recession appears to have passed, yet we remain in challenging times

  • Consumer restraint will likely become “the new normal”

  • Consumers are better informed and more demanding. Important to engage with them in both traditional & new ways

  • Success can be achieved by connecting with consumers & shoppers at the right place & time … anytime inside the gate

  • Targeted efforts will become more important:

    • Opportunity to increase trips inside the gate as consumers are shopping more outlets

    • Opportunity to increase impulse purchases

  • Continue to leverage insights to remain relevant with our consumers

  • Trusted brands and retailers will continue to win with innovation & differentiation


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Thank pre-store decisions You


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