CHICAGO — The growth in consumer packaged goods is anemic, and marketplace competition is fierce, so winning in this environment requires a keen understanding of consumers’ evolving path to purchase and dynamic marketplace shifts. To get a clear understanding of the rapidly changing CPG marketplace and the latest growth opportunities, IRI took a closer look at how consumers’ shopping patterns as well as emerging marketing programs are impacting retail channel trends in its granular analysis, “IRI Channel Performance Report.”
“It is becoming harder and harder to find growth opportunities in the CPG marketplace,” said Susan Viamari, vice president of Thought Leadership for IRI. “The path to purchase has forever changed. Shoppers are becoming increasingly demanding and embracing an omnichannel environment. And they are funneling their spending to channels and retail banners that best deliver on their expectations.
“That’s why it is imperative for retailers and manufacturers alike to have a clear perspective on which channels and departments are performing well, so they can figure out which opportunities will lead to growth.”
To help CPG marketers stay in lockstep with shoppers, IRI uncovered the following key insights regarding channel trends: grocery is standing strong amid intense competition, just-in-time shopping is impacting retail formats, and channel selection and evolving shopping preferences are spurring format experimentation.
During the past year, CPG industry sales topped $760 billion. The grocery channel accounted for 41% of dollar sales and 51% of unit sales and, despite being flat, outperformed competing channels for the year. Grocery’s above-average year-over-year performance does mark a change for the CPG industry. Club and dollar, for instance, outperformed grocery in average annual growth when measured over a three-year period. From 2013 to 2016, club channel dollar sales rose 2.6% annually, while dollar channel sales climbed an average 2.5% per year. During the same time period, grocery sales grew 1.6% and industry sales rose 1.8%.
IRI’s report also found that quick shopping trips account for more than half of all shopping trips. This has remained fairly unchanged during the past several years. However, retailers have been investing heavily in experimenting with new store formats as they struggle to find new paths to profitability in an industry with razor-thin margins and intense competition.