Transcript THE VALUE DRIVEN CONSUMER MORE THAN EVER, CANADIANS LOVE TO SAVE Carman Allison – Director of Consumer Insights.

THE VALUE DRIVEN
CONSUMER
MORE THAN EVER, CANADIANS LOVE TO SAVE
Carman Allison – Director of Consumer Insights
The world has changed
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Copyright ©2013 The Nielsen Company. Confidential and proprietary.
CANADIAN GROWTH IS SLOWING
Actual and Projected Canadian GDP Growth (2006-2017)
Actual
2,8%
Forecast
3,2%
2,7%
2,4%
1,9%
2,0%
2,4%
2,3%
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0,5%
v
2006
2007
2008
2010
2011
2012
2013
2014
2017
-2,6%
2009
Source: October 2012 World Economic Outlook Report and Statistics Canada, December 2012
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FUTURE GROWTH PROJECTIONS MODEST
Actual and Projected Canadian GDP Growth (2006-2017)
Actual
2,8%
Forecast
3,2%
2,7%
2,4%
1,9%
2,0%
2012
2013
2,4%
2,3%
2014
2017
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0,5%
2006
2007
2008
2010
2011
-2,6%
2009
Source: October 2012 World Economic Outlook Report and Statistics Canada, December 2012
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CANADIAN CONSUMER CONFIDENCE CONTINUES TO
INCREASE - SIGNS OF A MORE OPTIMISTIC CONSUMER
114
110
113
111 112
105
106
108
US
104
101
106
103
96
100
99
Canada
102 101
99 100
96
94
96
93
102
94
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96
93
92
84
90
87
83
82
84
80
81
81
83
89
83
78
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1H05 2H05 1H06 2H06 1H07 2H07 1H08 2H08 1H09 2H09 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13
Source: Nielsen Global Confidence Survey Q4 2012
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CANADIANS CONTINUE TO BE MORE OPTIMISTIC
THAN U.S. CONSUMERS
% Agree
Canada
U.S.
66%
54%
50%
44%
40%
-3
+1
JOB PROSPECTS
+7
+4
PERSONAL FINANCES
+3
41%
+5
GOOD TIME TO BUY
Source: Nielsen Global Online Consumer Confidence and Opinion Survey - Q1 2013 vs Q4 2012 - % Agree: Good and Excellent
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CANADA IS RANKED #11 OUT OF 58 COUNTRIES
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RANK COUNTRY
INDEX
CHANGE
1
INDONESIA
122
+5
2
INDIA
120
-1
3
PHILIPPINES
118
-1
4
THAILAND
116
+1
5
BRAZIL
111
0
6
UNITED ARAB EMIRATES
108
-5
7
CHINA
108
0
8
HONG KONG
108
+23
9
MALAYSIA
107
+4
10
NORWAY
106
+4
11
CANADA
102
+2
20
UNITED STATES
93
+4
Source: Nielsen Global Online Consumer Confidence Survey Q1, 2013
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CONSUMERS ARE STILL SHOWING
SPENDING RESTRAINT
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CANADIANS ARE SAVING MORE THAN SPENDING?
SPENDING STRATEGIES
Holidays/Vacations
25%
Clothes
22%
Home Improvement
Entertainment
Technology Products
20%
17%
14%
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
SAVING STRATEGIES
Paying Debts
42%
Savings
Retirement Fund
Investing
40%
18%
14%
Source: Nielsen Global Confidence Survey Q1 2013 - Canada
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BUT 20% OF CANADIANS HAVE NO SPARE CASH
28%
20%
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15%
Global
US
Canada
Source: Nielsen Global Confidence Survey Q1 2013 - Canada
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TOP CONCERNS FOR CANADIAN CONSUMERS
Debt
16%
Economy
14%
Job Security
Food Prices
10%
13%
8%
8%
Health
13%
12%
Rising Utilities
7%
Work/Life
Balance
7%
8%
11%
6%
1st Concern
Source: Nielsen Global Confidence Survey, Q4 2012 - Canada
11%
2nd Concern
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HOUSEHOLD BALANCE SHEET NOT IMPROVING
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AVG INCOME
• 2012: $46.6K
+3% from 2011
+14% from 2007
Source: StatisticsCanada
DEBT TO INCOME RATIO
• 2012: 164.6 +6%
• 2011: 160.9
• 2007: 124.9
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AS WE HEAD INTO 2013…..
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STILL UNCERTAIN
June 2009 NBER
3.5 years
Canadian Recession
Officially Ends
Q1 2013 NIELSEN
49% of consumers say
we are in a recession
Source: Nielsen Global Omnibus Consumer Confidence Survey Q1 2013- Canada
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WHAT’S BEEN THE IMPACT ON CPG?
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CPG PERFORMANCE STILL STRAINED
5
$%
Chg
Unit %
Chg
4
2
2
1
0
0
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2
2
2008
2009
2010
2011
0
2012
Source: Nielsen MarketTrack, Canada National All Channels – 52 weeks ending December 15, 2012
Total Tracked Sales excluding Fresh Random Weight
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TRADITIONAL CPG CHANNELS ARE STATIC
Total Market: $71.9 Billion (+2%)
All Other (+6%)
Convenience
& Gas (+2%)*
11%
6%
Drug (+2%)
11%
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72%
Grocery &
Mass (+2%)
Source: Nielsen MarketTrack, National, Dollars, 52 weeks ending March 9, 2013
Excludes Fresh Random Weight and Food Service; * Includes Tobacco
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FIVE KEY FUTURE GROWTH AREAS
VALUE
AGING
HEALTH
DIVERSE
CONNECTED
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VALUE IS A KEY DRIVER OF STORE CHOICE
• 59% - Good value for the money
• 59% - Great sales and promotions
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Store
Choice
Drivers
• 56% - Products in stock
• 55% - Lowest price
• 53% - High Quality Fresh & Produce
• 48% - Carries a Variety of items
• 48% - Quality Meat Department
Source: Nielsen Global Omnibus Survey – Canada – April 2011
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CONSUMERS ARE STILL FOCUSED ON SPENDING
RESTRAINT
$$$
63% are trying to
reduce household
expenses
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WHAT ARE CONSUMERS DOING TO SAVE?
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Top saving strategies:
• Only buy items when on sale
75%
• Use coupons
71%
• Stock up when on promotion
66%
• Seek out stores with lower prices
62%
• Buy lower priced store brands
53%
• Buy lower priced name brands
46%
• Shop at discount retailers
43%
$$$
Source: Nielsen PanelViews Survey - Canada - May 2012
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VALUE MOTIVATORS ARE DRIVING CPG GROWTH
36%
of dollar sales are sold with a price cut
48%
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+6%
growth in TPR sales - fueling growth
+6%
+6%
of units sales are sold with a price cut
increase in the coupon activity
growth from Discount Retailers
Source: Nielsen MarketTrack & Homescan – Q1 2013 CPG Review
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CONSUMERS ARE PLAYING THE MATCH GAME
Price Matching Grocery?
Why not matching?
29%
Yes
Source:
58%
Shop at the lowest price store
23%
Not worth the savings
19%
My store doesn’t offer program
12%
Forgot the competitive flyer
Nielsen Panel Views Survey 2012
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YOU CAN NO LONGER AFFORD TO BE
“MIDDLE OF THE ROAD”
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Manufacturers and Retailers
differentiate
need to
more
than ever – to get beyond price
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THE VALUE SEEKING CONSUMER
WHAT’S BEEN THE IMPACT ON STORE BRANDS?
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$$$
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BUYING STORE BRANDS IS A TOP 5 SAVING STRATEGY
BUT BEHIND PROMOTIONAL AND STORE SEEKING
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Top saving strategies:
• Only buy items when on sale
75%
• Use coupons
71%
• Stock up when on promotion
66%
• Seek out stores with lower prices
62%
• Buy lower priced store brands
53%
• Buy lower priced name brands
46%
• Shop at discount retailers
43%
$$$
57% in 2011
Source: Nielsen PanelViews Survey - Canada - May 2012
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STORE BRAND DOLLAR SHARE IS HOLDING
Increased dollar sales for National brands from inflation
$67.4 Billion*
Dollars +2%
Store Brands
$12.0 billion*
17,8
National Brands
$55.4 billion*
Units 0%
+1%
82,2
19,1
Tonnage 1%
+2%
80,9
+3%
23,5
+1%
76,5
-0%
+1%
Total Tracked Sales
Source: Nielsen MarketTrack, National All Channels - 52 Weeks to March 9, 2013 - Excludes Random Weight Fresh
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STORE BRAND SOFTNESS IS NOT A NEW TREND
FOR CANADA – DIFFERENT STORY FOR THE U.S.
Store Brand $ Share
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Canada
US
20
18,4
18,1
18,2
18,0
17,1
17,1
2011
2012
18
16
16,1
16,6
14
12
2009
2010
Note: US figures reinstated due to the recent inclusion of Walmart
Source: Nielsen MarketTrack, National All Channels, 52 Weeks to December 15, 2012 - Excludes Random Weight Fresh
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WHEN NATIONAL BRANDS ARE ON SALE THE PRICE IS
VERY CLOSE TO STORE BRANDS REGULAR PRICE
Price/Tonnage
NB Reg
NB TPR
SB Reg
SB TPR
2011
2012
$5.57 +3
$5.39
$3.58
$3.46
$2.94
Source: Nielsen MarketTrack, National G+MM+D 52 weeks to March 9, 2013
TPR = Temporary Price Reduction
$2.16
gap
$3.66 +2
$3.41 -1
$0.25
gap
$3.03 +3
Canadian Private Label Review
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STORE BRAND DOLLAR GROWTH SOFTENS, WITH
STRENGTH CONTINUING IN THE WEST
Store Brands
$ Share and
Growth
17,8
20,7
18,6
17,9
13,8
+1%
-1%
+1%
+0%
+1%
National
Maritimes
Quebec
Ontario
West
Dev Index
100
104
78
101
116
National Brand
+3
+1
+2
+2
+4
Source: Nielsen MarketTrack, National All Channels - 52 weeks to March 9, 2013 - * Excludes Random Weight Fresh
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STORE BRANDS SHARE STRENGTH IS PRIMARILY
PERIMETER OF STORE
Store Brands Dollar Share – $ % Chg
Total CPG
17.8
Deli (upc)
33,1
Produce (upc)
28.4
SB
NB
+1
+3
+4
+5
-1
+7
Bakery (upc)
27,2
±0
+1
Meat & Seafood (upc)
26,7
+7
+6
+0
+3
-1
+2
+2
+2
Grocery
Non Grocery
HABA
19,1
14,2
11,6
Source: Nielsen MarketTrack, National All Channels, 52 weeks to March 9, 2013 - * Excludes Random Weight Fresh
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STORE BRAND CONSUMER PURCHASE DYNAMICS
Penetration
100%
$/Household
$845 (-2%)
$/Trip
$12.57 (+0%)
Trips/Household
67.1 (-2%)
Source: Nielsen Homescan – All Channels - 52 weeks to August 25, 2012
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THE STORE BRAND CONSUMER PROFILE
$ Importance
Value
Index
4+ Members
28%
128
Aged 45-64
47%
105
Any Kids Under 18
45%
118
Higher Incomes $70k +
45%
109
Demographic Attribute
Source: Nielsen Homescan – All Channels
52 weeks to August 25, 2012
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THE FACE OF THE STORE BRAND CONSUMER IS CHANGING
$ Importance
Pt
Chg
1 Member
18%
+1.0
Aged Under 35
11%
+1.2
Lower Income >30k
19%
+2.2
Kids Aged 12 and Younger
31%
+1.9
Demographic Attribute
• The Store Brand household is becoming smaller, younger, with
lower incomes and younger children
• With this shift comes a unique set of needs; smaller sizes, adult vs.
new families pallets, lower prices and increased value
Source: Nielsen Homescan – All Channels 52 weeks to August 25, 2012
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STORE BRANDS ARE IN A POSITION TO COMPETE ON
QUALITY – BUT SCORES HAVE SLIGHTLY DECREASED
% Who Agree
2011
2012
Good Alternative
74%
72%
Equal Quality
66%
64%
Some Better Quality
42%
40%
Cheap Looking Packaging
23%
23%
Source: Nielsen PanelTrack, National, August 2012
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CONSUMERS HAVE POSITIVE ATTITUDES TOWARDS
VALUE PROPOSITION – BUT SCORES DECREASING
% Who Agree
2011
2012
Good Value
69%
66%
Mainstream Appeal
84%
82%
NB Worth Extra Price
25%
25%
Will Pay More for Favorite PL
39%
36%
Source: Nielsen PanelTrack, National, August 2012
Canadian Private Label Review
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Copyright ©2013 The Nielsen Company. Confidential and proprietary.
WHY DO CONSUMERS BUY STORE BRANDS?
Top 5 Influences
Food
Household
HABA
OTC
Price
59%
70%
59%
55%
Trusted/Previous Experience
26%
20%
24%
15%
Product Label
3%
2%
3%
3%
Family/Friend Recommendation
3%
1%
3%
2%
In-store Display
3%
3%
4%
1%
OTC: Pharmacist (18%) & Doctor Recommendation (3%)
Source:
Nielsen PanelTrack, National, August 2012
Canadian Private Label Review
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Copyright ©2013 The Nielsen Company. Confidential and proprietary.
INSIGHTS FOR MANUFACTURES
1
Differentiate yourself – lead the way with product
innovation, attractive packaging, convenient new
forms and desirable added ingredients
2
Out-market Retailers – Continue to reach consumers
with marketing vehicles not replicated by retailers. Align
your messaging around the unique role your brand
plays in consumer’s lives to legitimize the ‘brand tax’
3
Be mindful of price gap thresholds– if a strong
private label product launches in your category,
understand the price gap at which the product gains
significant traction with consumers.
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Copyright ©2013 The Nielsen Company. Confidential and proprietary.
INSIGHTS FOR RETAILERS
1
Determine role – Store Brands can be used to
differentiate and build store equity. Understand the
where SB sits versus other attributes important to
consumers -- assortment is a key motivator
2
Be a marketer – Market your brands vigorously using
the growth of multiple media including in-store and
online and mobile activities
3
Plan for the future – Innovate to meet the needs of
the evolving consumer: older, ethnic, and smaller
households with unique needs
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THANK YOU!
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Visit us online at nielsen.com
For the latest insights, visit us blog.nielsen.com/nielsenwire
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
Questions regarding the content of this presentation, contact:
Carman Allison, email [email protected]
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