CPG Spending Back on Track One Year After September 11, 2001

CHICAGO - Overall consumption of CPG products appears to have returned to normal a year after the tragic events on Sept. 11, 2001, but consumer shopping and purchase behavior continue to be influenced by concerns about the economy and national security, according to the latest report from Information Resources Inc. The report, "IRI Pulse: Consumer Shopping Trends Since September 11," found that over two-thirds of consumers indicate that they are worried about the economy as well as national security.

Some categories, such as dinner solutions, are experiencing exceptionally strong growth, as consumers eat at home more often since the tragedy -- over one-third of consumers responded that they are staying at home more. Convenient meal solutions, including refrigerated, fully prepared barbecued meats, skillet meals, breaded entrees, frozen seafood and meat products and the ever-popular shelf-stable pasta kits like macaroni and cheese, have been feeding America.

While non-food CPG categories were hit particularly hard following Sept. 11, non-food CPG consumption is now making a significant turnaround, specifically in the beauty care and pet care categories, according to IRI. Consumers have resumed purchasing many "non-essentials," and many are likely switching back to premium brands. Strong new product introductions that contribute to category expansion, such as battery-operated toothbrushes, disposable facial cleansing cloths and disposable surface cleaning cloths, have also played a major role in driving growth.

"Our latest analysis indicates that despite a downturn in many industries following Sept. 11, consumers are continuing to purchase the CPG products they need to carry on with their everyday lives," said Ed Kuehnle, group president, IRI North America. "Yet, they are still living with major uncertainty, which has impacted shopping behavior. Economic concerns have made them more value conscious than ever, while safety concerns underlie their gravitation towards the comfortable and familiar, such as their favorite name brands."

That sentiment is supported by IRI's survey results that reported 26 percent of consumers indicated they were spending less after Sept. 11, creating opportunities for discount retailers like Wal-Mart, whose 13.6 percent growth mid-year contributed 50 percent of total CPG growth. Trips per household in the 24 weeks through June 30, 2002 to Wal-Mart grew by 5.3 percent, while declining by 4.4 percent at food stores and 3.8 percent at drug stores.

IRI Pulse is based on an extensive analysis of IRI store data and panel data, as well as a survey of over 4,700 IRI panelists.
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