Our analysis also shows that in 2008, shoppers migrated their spending toward value channels like supercenters, club retailers and dollar stores, and away from convenience channels and drug stores, likely driven by efforts to scale back on impulse purchasing. We can expect similar trends looking forward.
Notably, over the past 10 years, the dollar channel has expanded significantly in the United States, with two of the major U.S. chains approximately doubling their store counts, and two new European banners entering the U.S. market. With a broader presence and enhanced focus on value pricing, the dollar channel is likely to gain momentum and capture an even larger portion of grocery spending amid the current recession.
At the category level, in 2008, shoppers relinquished brand loyalties in favor of better deals, shifted spending toward essentials and away from “wants” in the beauty and personal care categories, and cut back on perceived luxuries like organic produce. This led to a bump in value-tier and private label brands as deal-conscious shoppers let go of their brand loyalties in favor of savings. While purchases of “affordable luxuries” like chocolate and ice cream persisted, a focus on value continued to motivate purchases.
Implications for 2020 and Beyond
Though the catalyst for the current economic environment is less nuanced and had even greater immediate impact on shoppers nationwide than the events of 2008, consumers today are similarly short on money and confidence, and have shifted their eating habits to rely significantly more on at-home, from-scratch cooking.
Looking ahead, comprehensive, real-time data and insights show that brands should retain the millions of new buyers that they’ve acquired in the past few months by doubling down on value-capturing pack sizes, enhancing their price mix, and focusing innovation to meet demands of shoppers adjusting to our society’s new stay-at-home culture.