Retailers and Manufacturers Split on Dollar Sales Growth for Rest of Year

A new survey of grocery manufacturers and retailers by SMARTeam, Irvine, Calif.-based Advantage Sales’ consumer goods insights team, has found that halfway through 2021, as the country starts to ease pandemic restrictions, grocery industry players are concerned with the nature of post-pandemic sales, optimal product pricing and assortment, and return on their e-commerce investments. 

According to the survey, however, while product manufacturers and retailers differ considerably in their views on likely sales strength in the second half of the year, and where those sales will occur — online or in stores — they are in sync in one key respect: the transformative nature of digital commerce.

Among the findings in “Outlook June 2021: Grocery Manufacturers and Retailers:” 

• Six in 10 manufacturers foresee increases in dollar sales through the second half of 2021, while seven in 10 retailers are predicting decreases.
• While 37% of manufacturers expect their online dollar sales to be higher than 21% by 2025, just 14% of retailers believe the share of their online sales will be that high.
• More than three-quarters of manufacturers have taken price increases this year or plan to in the future.
• 65% of retailers are in the process of reducing SKUs, while manufacturers who are most affected are likely to double down on product innovation or promotions to regain lost distribution.
• Only 20% of retailers make their digital commerce sales data available to manufacturers now or plan to in the near future.
• Third-party delivery services Instacart and Shipt are rising in importance, with 37% of manufacturers placing them in their top five e-commerce priorities.
• Just 7% of manufacturers believe a retail media network spend is “extremely effective” compared with their traditional spends with retailers.

“While retailers and manufacturers navigate the accelerated change in grocery retailing, greater transparency and more forward-thinking business planning is needed,” the report noted. “Closer partnerships and mutual understanding may be two positives left in the wake of COVID-19.”

The full report is available online.