In all countries volumes have been decreasing for several months. Sensitivity to price rises in Non Food categories is an impacting factor but not the only one, consumers and shoppers have adapted their habits as tough times are here to stay: more multi purposes products, less wastage, making products last longer… Buying what they need when they need it, using up what they have already and wasting less!

The three tips to re-energize this segment:

• Stimulate need through media activity.
• Look for opportunities to extend distribution. Even the best-selling brands often do not have full distribution. Increasing distribution impacts overall sales directly. A good rate of sale argument will influence retail buyers.
• Retailers and manufacturers must work together and invest to define specific merchandising strategies with specific tactics to create impulse purchasing on non-essential items, creating occasions ‘for special treats’ at a reasonable price.

What would be yours?

To know more about FMCG trends, facts and pressure points impacting FMCG retailers and manufacturers, download our IRI Topline Report – click here.

All over Europe we are seeing clear signs that shoppers are managing their grocery budgets through tough times. FMCG volumes sales are impacted as shoppers are smart to control their weekly grocery expenses:  less impulse purchasing, less shopping trips, smaller basket sizes, less waste at home and so trade promotions are becoming more and more common in the struggle to encourage sales growth.

And, as private labels are behaving more and more like national brands but at a lower price, their share is growing almost everywhere, which leaves room for small luxury items. We all know the success of coffee caps Nespresso for instance. It’s part of the Shopping Experience which is for 75% of the shopper surveyed in Europe*, as well as price and promotion, the two key factors impacting store selection!

Political uncertainty, austerity measures and rising unemployment are affecting several of the major economies in Europe. These factors, along with prices rising faster than wages are concentrating our minds on how to do the weekly shopping in the most cost-efficient way.

FMCG volumes sales are down in Italy, Greece and the Netherlands, with the effect of price rises most noticeable in Germany, where, despite a relatively strong performance by the economy in general, food volumes have fallen by almost 2% last year. FMCG volumes are flat year-on-year in the UK and although still rising in France and Spain, growth has reached its lowest for 3 years by the end of 2012.

As a rule, European shoppers have reduced their purchasing of non-food items such as cleaning materials and personal care, whilst maintaining the more essential food purchasing. However, as we approach another period of food price inflation, these sales could well come under severe pressure too.

But the local dynamics are very different, so it’s essential for marketers to understand the differences and to react accordingly.

To get an overview of the key trends, facts and pressure points impacting FMCG manufacturers and retailers across seven major European countries, view our latest video podcast – click here.

*IRI European Shopper Survey – end 2012

Retailer own label food and drink sales have risen for the 1st time in 3 years. More sophisticated offers at both ends of the retail own brand price spectrum have brought about this resurgence.

This IRI report investigates the status of retailer own label and demonstrates that shopper engagement is more complex than purely a price choice. Shopper choice is a highly emotional area dependant on category.

[Read more...]