Editor's note: This article appeared in the January 11, 2010, edition of Quirk's e-newsletter.
The businesses that made it through a scarce and slow 2009 anxiously await the good news of economic recovery to hit consumers in their daily lives (and bank accounts), but 2010 may hold even more winnowing of the weak as consumers continue to hunt out the best quality for the lowest price. So who stands to benefit? Store-brands and trade-down options, it seems, according to Todd Hale's December 16, 2009, blog post titled "Winner Winner Chicken Dinner - Top Consumer Goods Spending Trends" on New York research The Nielsen Company's site Nielsen Wire. From choosing chicken over shrimp to an overall simpler shopping experience, here are five trends Hale identified that companies and marketers can plan for in the upcoming year.
Restraint remains the new normal
Americans' confidence has been slower to rebound compared to other parts of the world. Unemployment, the need to save money and other economic issues continue to be top of mind, suggesting that any return to past behavior may take some time - if past behaviors return at all.
Value is a top priority
With no signs of readiness to open wallets, a focus on low prices at the expense of all other variables threatens margins. Value messaging must also include some point of differentiation beyond pricing. Manufacturers and retailers that "drive the recession wave" and take an active role in innovation and ad spending are likely to be the big winners.
Store-brand growth continues
Even with year-end 2009 softness in store-brand dollar share growth as retailers cut prices to be more competitive, unit share growth continues and retailer focus on store brands has never been stronger.
Grocery consolidation intensifies
Local and regional players, unable to drive profits in the soft economy, will become acquisition targets and some larger national and regional grocers will divest unprofitable formats and banners to strengthen investments behind their winning formats and banners.
Assortment wars escalate
Retailer efforts to simplify the consumer shopping experience by eliminating aisle and shelf clutter will cause market share land grabs for small and medium-sized brands in pursuit of elusive revenue growth. Retailers may lose sales as they shift away from in-store merchandising that drove impulse buying and built shopper baskets. Look for brands caught in the trap of greater store-brand focus and assortment optimization to forge alliances with key retailers; enter or step-up efforts as store-brand suppliers; and/or explore direct-to-consumer sales.