covid-19 - changing shape of the demand curve - iri...2018/03/06 · total u.s. - club 103 106 127...
TRANSCRIPT
June 18, 2020
PART 3 ̶ THE CHANGING SHAPE OF THE CPG DEMAND CURVE
COVID-19 and Navigating the Path Ahead
Tracking Transformation of the Retail Landscape
Read Other CPG Demand Curve-Focused Reports: Part 1 - Shopper Engagement, E-Commerce, CPG Demand & Beauty
Part 2 - Meat and Millennials’ Impact on CPG Demand Curve
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 2
HOW CAN IRI HELP?
THE TRANSFORMING CPG LANDSCAPE
• E-commerce, Dollar and Grocery are the big gainers in sales and traffic
• Shoppers’ trips and shopping patterns have rebounded recently; average spend per trip is up double digits
• Edible aisles have driven sales growth in Grocery and Mass channels, where increased traffic is also leading to strong sales for nonedible aisles; assortments have fallen across aisles and channels
• Increased demand is benefiting smaller manufacturers more as they pick up distribution
• E-commerce is playing a bigger role in Nonedible, especially Healthcare, Cosmetics, Personal Care, Baby and Pet
• Convenience sales recovered in May as states begin to reopen
Executive Summary
The ripple effects of COVID-19 will
change the CPG demand curve for
many years. With changing consumer
behavior come new demands on CPG
retail, including where consumers shop
and how they engage with retailers.
As states eased restrictions, retail
sales rebounded by ~18% in May (vs.
April); also consumers benefited from
federal stimulus checks and increased
unemployment benefits. In this report,
we provide our perspectives to help
manufacturers and retailers meet
altered – and transforming – demand.
• Shopper Retention Strategy
• CPG-Retail Collaboration Strategy
• Channel Strategy
• Revenue Growth Management
• Assortment Optimization
• IRI eMarket Insights
LOOKING AHEAD
• Expect measured channels’ CPG sales to remain elevated through 2021, driven by lingering stay-at-home behaviors as out-of-home activity returns, but to decline in 2021 vs. 2020; expect 2020-21 growth to be higher than prior years, with more sales in e-commerce
• Grocery growth should continue to outpace other channels in 2020 as consumers continue to make large, edible-focused trips
• Convenience will rebound as the economy reopens, but weak income growth will limit sales growth
• Retailers will continue to invest in digital and delivery solutions; physical stores will adjust to accommodate social distancing and communicate safety to customers and employees. Retailers will evolve to make shopping convenient and emphasize overall value
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 3
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 4
COVID-19 Pandemic Impacted the World,
Including Changes in Eating, Home and Personal Care
The U.S. food dollar shifted almost entirely to the home
with stay-at-home directives.
COVID-19 triggered heightened attention to
personal and home care.
Spring and Summer holidays and celebrations are being re-calibrated as small, at-home –
sometimes virtual – events.At-home occasions will continue to
dominate in 2020 as COVID-19 impact is joined by recession.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 5
Consumer Behavior Accelerates
Retail Transformation
• Consumers are more comfortable with
omnichannel experiences
• As online adoption accelerates, consumers
are comparing prices more rigorously
• Assortments need to balance supply chain
efficiencies versus shoppers’ increased
craving for variety and convenience
• With demand surge, retailers need to evolve
own brands to meet new demand spaces
• Online search needs to catch up with
consumer demands
COVID-19
Forces
Long-Lasting
In-Store Impact
Plexiglass
Contactless
Payments
Curbside
Pickup
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 6
Online and Food and Beverages Stores Are the Bright
Spots in U.S. Retail; Foodservice Recovering in May
U.S. Retail Sales $B by Store Type, February - May 2020
Greater increases in spend for younger
generations (Millennials, Gen Z)
vs. Boomers in early reopened states2
Pent-up demand for cars, furniture, apparel, etc.
Online sales continue to rise despite store
reopenings
Foodservice is at 60% of February level
and accounts for 35% of food retail sales vs. 50% in February
Source: U.S. Census Retail Trade advanced estimates seasonally adjusted. IRI Consulting analysis.1. Includes Auto, Gas, Furniture, Building Materials, Clothing, Electronics, and Sporting retailers. 2. JP Morgan Chase Consumer Card Spending Tracker.
69
(12%)
228
(45%)
73
(14%)
30 (5%)
30 (7%)
269
(48%)
46 (9%)
65
(13%)
72
(14%)
32 (6%)
March
71
(16%)
39 (8%)
56 (13%)
79
(18%)
82
(16%)
176
(40%)
Food Service & Drinking Places
April
60
(12%)
27 (6%)86
(17%)
27 (5%)Health & Personal
Care Stores
May
Gen Merch Retailers
F&B Stores
All Other Retail1
$557 B
$516 B
$439 B
64
(12%)
219
(43%)
February
65
(12%)
60
(11%)
$513 B
Non-Store Retailers (e.g., Online)
-7%
-15%+17% May vs.
Feb. Index
85
90
125
99
59
113
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 7
CY
2019
Jan +
FebMar Apr May
CY
2019
Jan +
FebMar Apr May
CY
2019
Jan +
FebMar Apr May
3.6% 2.3% 2.3% 3.4% 4.7%2.6% 2.5% 5.0% 9.8% 9.6%2.8% 2.4% 3.1% 6.3% 6.8%
-1.7% -1.0% 22.5% 0.0% 0.7%-0.1% -0.5% 30.2% 8.8% 7.6%-0.4% -0.6% 28.4% 6.8% 6.0%
At-Home Edible Sales Continue to Grow in Double-Digits
Along With Accelerating Price / Mix Across CPG
U.S. CPG Retail Sales Growth in Measured Channels (MULO+C)
Volume1 Sales %
Change vs. YA
2.3 1.7
32.4
13.6 13.3
2.5 2.3 1.7 4.0 4.9
-0.6
30.2
9.3 8.0
-0.2
2.6 2.0
36.6
19.5 17.9
1.8 1.7 1.1 3.6 4.6
0.8 0.3
35.1
15.4 12.7
1.8 1.4
25.3
3.4 5.4
3.7 3.4 2.9 4.7 5.3
-1.8 -2.0
21.8
-1.3
0.1
1. Dollar-weighted average change across categories. Source: IRI POS data Total U.S. MULO+C ending 5/31/20.
Dollar Sales %
Change vs. YA
Price / Vol1 %
Change vs. YA
Price / Unit %
Change vs. YA
Unit Sales %
Change vs. YA
Total Store – 2020 Edible – 2020 Nonedible – 2020
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 8
E-Commerce 133 125 156 175 178
Consumers Are Back in May; Shift to Larger Pantry-Stock Trips
Continues; Online, Dollar and Grocery Channels Are the Winners
IRI CPG Demand Index: Total Store
$
4 WE 1/26/20 4 WE 2/23/20 4 WE 3/22/20 4 WE 4/19/20 4 WE 5/17/20
Tri
ps
Total U.S. - All Outlets 101 104 124 95 101
Total U.S. - GroceryX 100 104 132 102 104
Total U.S. - Drug 96 94 111 80 81
Total U.S. - MassX 88 94 113 73 79
Total U.S. - Club 103 106 127 94 103
Total U.S. - Dollar 105 106 138 100 106
Total U.S. - Walmart Total 102 106 115 86 90
$ p
er
Tri
p
Total U.S. - All Outlets 100 99 109 122 121
Total U.S. - GroceryX 99 98 109 125 123
Total U.S. - Drug 104 106 112 114 116
Total U.S. - MassX 104 93 112 117 111
Total U.S. - Club 97 98 106 120 118
Total U.S. - Dollar 100 101 117 127 124
Total U.S. - Walmart Total 99 99 110 121 122
Source: IRI Consumer Network Panel, IRI eMarketing Insights data ending 5/17/20.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 9
Daily Shopping Patterns Have Mostly Reverted to Pre-COVID-19 Trends
Source: IRI Daily Chain POS data ending 5/31/20.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
M Tu W Th F Sa Su
February
M Tu W Th F Sa Su
March
M Tu W Th F Sa Su
April
M Tu W Th F Sa Su
May
Total Store Average Dollar Sales Distribution by Day of Week
During early stay-at-home weeks, shoppers changed weekend routines and did more brick-
and-mortar shopping mid-week. As states reopen, shopping has shifted back to weekends.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 10
ChannelCY 2019
Sales ($B)
Dollar Sales
2016-2018 CAGR
Dollar Sales % Change vs. YA
CY 2019 January+February March April May
Grocery $320.4
Mass $230.3
Drug $47.8
All Other $77.2
MULO $675.7
Convenience $161.0
MULO+C $836.8
22.0%
10.9%
-4.1%
11.7%
15.2%
5.6%
13.3%
Grocery CPG Sales Growth Accelerated Post-COVID-19,
While Convenience and Drug Lagged
Dollar Sales Trends in Measured Channels / Total Store
0.9%
3.3%
-1.4%
0.7%
1.5%
2.5%
1.7%
1.7
1.6%
3.8%
-0.5%
0.5%
2.1%
3.3%
2.3%
2.3
1.0%
3.2%
-0.2%
-0.2%
1.5%
2.8%
1.7%
1.7
29.0%
7.8%
-9.2%
13.5%
17.1%
-1.1%
13.6%
13.6 13.3
Source: IRI POS data ending 5/31/20.
51.2%
28.7%
22.4%
39.8%
40.1%
-0.4%
32.4%
32.4
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 11
2% 10% 35% 74%
2% 11% 29% 141%
2% 19% 22% 92%
2% - 32% -
4% 14% Not Reported Not Reported
2% 14% 43% 42%
Not Reported 8% Not Reported Not Reported
3% - Not Reported Not Reported
2% - Not Reported Not Reported
8% 8% 28% 66%
1% 12% 33% 40%
Retailers Across Channels Had Significant Sales Gains Over the Recent
Quarter, With Particular Growth Coming from Their Digital Platforms
Pre-COVID-19 vs. COVID-19 Quarterly Earnings – Multiple Retailers
Retailer
Same Store Sales Digital Sales
Recent Quarter
End DatePre-COVID-19
Quarter
Recent Quarter
(COVID-19)
Pre-COVID-19
Quarter
Recent Quarter
(COVID-19)
Mass 5/1
5/1
Gro
cery
5/23
2/29
3/28
3/29
Dru
g
3/31
2/29
2/29
Clu
b 5/10
5/1
Source: Most Recent Quarterly Earnings Reports, Multiple Retailers.
“-” Indicates Retailers Where Most Recently
Reported Quarter is Pre-COVID-19
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 12
E-Commerce Accounts for the Greatest Change in Share Due
to Nonedible Purchase Shifts; Grocery Is the Winner for Edible
$ Share by Channel: Before, During, After Stockpiling Peak
TOTAL STORE TOTAL EDIBLE TOTAL NONEDIBLE
31.2 33.7 32.8
22.121.6 20.2
14.2 11.7 13.3
12.7 12.2 15.6
8.9 9.48.4
4.7 4.6
4.3 4.5
PeakPre-Peak Post-Peak
3.71.9 2.3 2.2
3.8
44.6 46.8 46.1
21.4 20.6 19.5
12.3 10.0 11.2
6.4 6.1 7.7
8.7 9.6 8.7
1.7
Pre-Peak
3.12.0
Peak Post-Peak
1.63.33.4
1.81.6 1.8
12.5 14.9 12.6
22.822.8
21.0
16.7 13.916.1
21.4 21.0 27.5
9.3 9.38.0
8.3 8.56.8
6.5 6.4 4.9
Post-PeakPeakPre-Peak
3.22.5 3.0
-0.5
+0.3
-1.0
-0.5
+2.9
-0.9
-1.9
+1.6
Share Chg. Post vs. Pre
+0.2
+0.2
-0.4
0.0
+1.3
-1.1
-1.9
+1.5
-1.6
+0.5
-1.5
-1.3
+6.1
-0.6
-1.8
+0.1
Source: IRI POS, Panel, and E-Market Insights Data. Pre-Peak 8 weeks ending 2/23, Peak = 4 weeks ending 3/22, Post-Peak 8 weeks ending 5/17.Note: Top All Other retailers include Specialty Stores, Liquor, Pet, and Military. E-Commerce sales are collected via 204 tracked categories, with share scaled up to match coverage of total store.
ALL
OTHER
DOLLAR
DRUG
CLUB
E-COMM
CONV
MASS
GROCERY
Share Chg. Post vs. Pre
Share Chg. Post vs. Pre
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 13
Baby Food & Care -$14 (-4%) -$22 (-3%) $0 (0%) -$7 (-10%) -$6 (-5% -$48 (-4%)
Cosmetics -$4 (-8%) -$11 (-4%) $0 (-17%) -$27 (-13%) $1 (3%) -$41 (-7%)
General Merchandise $170 (23%) $287 (16%) $13 (5%) $12 (9%) $75 (13%) $557 (16%)
Home Care $100 (18%) $156 (18%) $2 (16%) $16 (20%) $78 (17%) $353 (18%)
OTC Healthcare -$1 (0%) $1 (0%) -$21 (-16%) -$95 (-8%) -$2 (-1%) -$118 (-3%)
Paper Products $112 (24%) $37 (8%) $3 (43%) $5 (9%) $18 (6%) $175 (14%)
Personal Care $83 (12%) $90 (5%) $7 (24%) -$5 (-1%) $28 (8%) $204 (5%)
Pet Food & Care $11 (2%) -$4 (0%) $0 (1%) $1 (4%) -$1 (0%) $7 (0%)
Total Nonedible $458 (12%) $534 (7%) $5 (1%) -$100 (-4%) $192 (8%) $1,089 (5%)
Alcohol $606 (32%) $124 (24%) $482 (26%) $27 (14%) $39 (25%) $1,278 (28%)
Beverages $446 (16%) $164 (11%) -$5 (0%) -$19 (-8%) $69 (9%) $654 (8%)
Dairy $677 (24%) $168 (16%) -$1 (-1%) -$1 (-3%) $72 (22%) $915 (22%)
Fresh Foods $1,865 (15%) $263 (7%) -$51 (-10%) -$10 (-18%) $117 (12%) $2,185 (12%)
Frozen Foods $874 (34%) $303 (24%) $8 (4%) $9 (23%) $153 (30%) $1,348 (30%)
Packaged Food (excl. Snacks & Candy) $1,334 (30%) $352 (17%) -$5 (-3%) $5 (7%) $162 (25%) $1,848 (25%)
Snacks & Candy $233 (12%) $85 (7%) -$71 (-5%) -$31 (-10%) $49 (5%) $265 (5%)
Total Edible $6,037 (21%) $1,458 (13%) $357 (5%) -$19 (-2%) $660 (17%) $8,493 (18%)
Grocery Mass Conv Drug All Other Total MULO+C
ED
IBL
EN
ON
ED
IBL
EEdible Aisles Have Driven Sales Growth in Grocery and Mass, Where
Increased Traffic Is Also Leading to Strong Sales for Nonedible Aisles
Aisle $ Growth by Channel Absolute Dollar ($M) Change vs. YA (% Change vs. YA – May 2020 vs. YA)
Source: IRI POS Data ending May 31, 2020. IRI Analysis.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 14
Baby Food & Care -16 (-3%) -96 (-6%) 1 (14%) -13 (-7%)
Cosmetics -45 (-10%) -196 (-7%) 0 (-22%) -167 (-16%)
General Merchandise 35 (3%) -387 (-7%) 0 (0%) -21 (-5%)
Home Care -88 (-9%) -92 (-5%) 0 (-2%) -3 (-1%)
OTC Healthcare -75 (-5%) -195 (-6%) -8 (-11%) -188 (-9%)
Paper Products -43 (-32%) -56 (-33%) -1 (-21%) -24 (-39%)
Personal Care -32 (-1%) -138 (-2%) -2 (-8%) -87 (-3%)
Pet Food & Care 0 (0%) -72 (-4%) 0 (-5%) 0 (0%)
Total Nonedible -263 (-4%) -1232 (-6%) -11 (-6%) -503 (-8%)
Alcohol 24 (2%) 50 (8%) 12 (6%) 13 (5%)
Beverages -1 (0%) 18 (1%) 4 (1%) 4 (1%)
Dairy -17 (-2%) -43 (-5%) -1 (-6%) -2 (-6%)
Fresh Foods -142 (-5%) -295 (-10%) -6 (-5%) -8 (-9%)
Frozen Foods -90 (-4%) -238 (-13%) 0 (0%) 2 (2%)
Packaged Food (excl. Snacks & Candy) -218 (-4%) -478 (-8%) -4 (-3%) 0 (0%)
Snacks & Candy -49 (-3%) -89 (-4%) -35 (-6%) -72 (-6%)
Total Edible -494 (-3%) -1074 (-6%) -30 (-2%) -63 (-3%)
Grocery Mass Conv DrugE
DIB
LE
NO
NE
DIB
LE
As Retailers Reduce Space and Many Manufacturers Streamline Products
to Ensure Inventory, Assortment Has Fallen Across Aisles and Channels
Assortment Changes by Channel / Average Items per Store Selling
Chg. vs. YA, % Items Chg. vs. YA – May 2020 vs. YA
General
Merchandise has
been the primary
shelf space gainer
in Grocery, with
categories
typically
purchased
elsewhere like
candles,
kitchenware and
lawncare
increasing most.
Items Change vs. YA (% Change vs. YA)
High margin
category valuable
to increase space
Items per Store
selling counts the
average number
of unique SKUs
that have sold per
store in May;
Driven by Out of
Stocks and
rationalization of
items in response
to high demand
Source: IRI POS Data ending May 31, 2020. IRI Analysis.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 15
Increased Demand Is Benefiting Smaller
Manufacturers More as They Pick Up Distribution
% Share of Total Store Sales by CPG Manufacturer Size /
Total U.S. Measured Channels (MULO+C)
47.1 46.7 46.4 45.5
16.0 16.0 15.9 16.1
12.6 12.6 12.7 13.2
8.6 8.6 8.3 9.2
15.6 16.1 16.7 16.0
Large
2020 Post-Peak2019 2020 Pre-Peak 2020 Peak
Medium
Small
Extra Small
Private Label +0.3
+0.1
+0.1
+0.1
-0.7
+0.3
+0.1
+0.1
-0.1
-0.4
+1.1
-0.2
+0.1
-0.1
-0.9
vs. YA vs. YA vs. YA vs. YA
+0.7
+0.5
+0.7
+0.1
-2.0
Smaller Manufacturers Are Gaining Distribution and Velocity as Larger
Manufacturers Face Supply Constraints
and/or Focus on Core Lines in Face
of High Demand
Large Manufacturers Are Growing Through
Velocity With a Slight Decline in
Distribution Points
Greater Growth for Small and Medium
Manufacturers in Edible Than Nonedible
Source: IRI POS Data MULO+C. IRI Consulting Analysis.
Note: Large is $5.5B+ in L52W, Medium $1-5.5B, Small $100M-1B and Extra Small <$100M. Pre-Peak 8 WE 2/23/20, Peak 4 WE 3/22/20, Post-Peak 8 WE 5/17/20.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 16
Across Channels, Price Inflation Peaked in Early April With Grocery
Having the Largest Increase Since the Beginning of the Year…
IRI CPG Inflation Tracker – Typical Pantry Stocking Baskets of Three Generations
Index of Generation Cohort Basket vs. WE 1/5/20
0
105
100
110
115
MULO
0
105
100
110
115
Grocery
Millennials
Boomers
Families
100
0
105
110
115
Mass
1/5 2/2 3/1 3/29 4/26 5/24 1/5 2/2 3/1 3/29 4/26 5/24 1/5 2/2 3/1 3/29 4/26 5/24
Source: IRI POS data ending 05/31/20. / Typical grocery baskets for various cohort types is a mix of Produce, Refrigerated Foods, Snacks, Frozen Food, Dairy, Meat, and Pantry items.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 17
…while Stores – Especially Grocery – Have Reduced Price Promotions
Weekly % of Dollar Sales on Price Reduction Promotion / Current and Ppt. Change vs. YA
26.7
23.5
18.519.3
MarJan-Feb Apr May
+0.3 -3.1 -9.1 -8.2
Ppt. Change vs. YA
8.77.3 6.6
5.6
AprJan-Feb Mar May
25.624.5 24.5
23.0
Jan-Feb Mar Apr May
+0.1 -0.6 -2.4 -3.7 -1.0 0.0 -1.0 -0.9
Grocery Mass Drug
Source: IRI POS Data. IRI Consulting Analysis, Data Ending May 17, 2020.
Ppt. Change vs. YAPpt. Change vs. YA
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 18
E-Commerce Is Playing a Bigger Role in Nonedible, Especially
Healthcare, Cosmetics, Personal Care, Baby and Pet
E-Commerce Share of Omnichannel – Monthly View / Monthly Ending 5/31/20
118
30
59
3911
8
28
48
310
1411
39
511
4
12129
38
510
4
11
Fresh Foods DairyPackaged FoodBeverage Frozen Foods Baby Food + Care Snacks + Candy
+1+1
+8
0+2
0
+3
4136
28
12
39
26
17
47
35
27
11
40
24
15
56
44
31
13
46
36
21
50
42
31
14
45
36
20
Pet Food + Care Home CareGeneral Merchandise OTC HealthcareCosmetics Personal Care Paper Products
+9
+6
+3
+2
+6
+10
+3
EDIBLE
NONEDIBLE
Source: IRI eMarket Insights, based on 204 releasable eMarket Insights categories. Share based on available categories vs. MULO excluding Convenience and other unmeasured channels.
Jan + Feb
March
April
May
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 19
CPG Manufacturers Are Also Increasing D2C Options
E-Commerce Sales Are Significantly Higher Post-COVID-19 for All Retailers;
Amazon, Target and Shared Delivery Services Gained Most vs. Jan + Feb
E-Commerce Dollar Change vs. YA / Monthly Ending 5/31/20, E-Commerce-RMA
34%
90%
60% 47%17%
69%
-11%
38% 45%30%
58%
123% 151%
98%
49%
114%
57% 46%
212%
60%
80%120%
287%
93% 87%
144% 146%
-42%
211%
78%85%
203%
54%
88%115% 103%
-35%
118%
71%
PeapodAmazon TargetWalmart ShiptSam’s Club HEBKroger Costco Total eCom
64%
Share of Total E-Commerce
Jan+Feb 51.7% 13.4% 1.7% 1.6% 1.4% 1.1% 0.9% 0.8% 0.7%
March 49.2% 13.2% 2.4% 1.9% 1.4% 1.1% 1.0% 0.7% 1.3%
April 48.7% 12.3% 3.5% 1.5% 1.5% 1.1% 1.4% 0.2% 1.3%
May 52.9% 10.2% 2.8% 1.6% 1.6% 1.0% 1.3% 0.3% 0.8%
Primary
Fulfillment
Method
Greater Share in May vs. Jan / Feb
Source: IRI eMarket Insights, based on 204 releasable eMarket Insights categories.
Instacart reports order volumes have surged as much as 500%
Jan + Feb
March
April
May
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 20
Convenience Sales Dipped in March and April, But
Recovered in May as States Began to Reopen
Retail Sales Growth in Convenience Channel
Volume1 Sales %
Change vs. YA
Dollar Sales %
Change vs. YA
Price / Vol1 %
Change vs. YA
Price / Unit %
Change vs. YA
Unit Sales %
Change vs. YA
Note: CY 2019 WE 12/29/19. Source: IRI POS Data, IRI POS – Convenience. IRI Growth Consulting Analysis.
Total Store – 2020 Edible – 2020 Nonedible – 2020
CY
2019
Jan +
FebMar Apr May
CY
2019
Jan +
FebMar Apr May
CY
2019
Jan +
FebMar Apr May
4.5% 2.4% 3.7% 4.0% 3.0%4.2% 3.7% 8.2% 14.7% 12.5%4.1% 3.0% 8.1% 12.9% 9.8%
-1.7% -0.5% -1.1% -1.6% 2.6%-0.3% 0.0% -10.5% -16.5% -6.3%-0.7% -0.2% -7.9% -12.3% -3.8%
3.3 2.8
-0.4 -1.1
5.6
3.6 3.4 2.7 3.4 3.8
-0.3 -0.6-3.0 -4.4
1.7
3.9 3.7
-3.2 -4.2
5.5
3.2 2.6 1.3 2.54.2
0.7 1.0
-4.4-6.6
1.2
2.8 1.9 2.6 2.45.7
4.1 4.1 4.1 4.4 3.4
-1.3 -2.1 -1.5 -1.9
2.3
Growth driven by alcohol
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 21
Reopening Is Improving Trips to Convenience Stores, With Traffic
Shifting to Mid-Day, Afternoons and Evenings vs. Morning and Late Night
-11.1
-22.4-15.8
Total U.S.
+6.5
-9.8
-19.6-13.3
Reopened States
+6.3 YTD’20
L4 Weeks
L12 Weeks
Product Trips % Change vs. YA
Total US
Reopened
states Total US
Reopened
states Total US
Reopened
states Total US
Reopened
states Total US
Reopened
states Total US
Reopened
states
Share of Week PPT
Chg vs. YA -1.0 -0.8 -1.9 -1.9 1.1 0.9 0.9 0.7 1.7 1.5 -0.8 -0.5
-15.8
-26.6 -23.1
-11.7 -12.3-7.6
-23.2
-13.3-22.1 -20.4
-9.8 -10.4-5.1
-18.0
Afternoon (2p-6p)Total Day Morning (6a-10a)Early Morning (2a-6a) Mid Day (10a-2p) Evening (6p-10p) Late Night (10p-2a)
+2.5 +4.5 +2.7 +1.8 +1.9 +2.4 +5.2
Daypart Product Trips % Change vs. YA, Latest 4 WeeksTotal U.S. Convenience
Reopened Convenience States
Source: Major Convenience retailers daypart data for General Food, data ending 6/7/20.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 22
Top Categories in Convenience Accelerated as
Alcoholic Drinks and Ice Cream Drove Edible
Top Growing Categories / % Change vs. YA, CY 2019 – 2020 Ending 5/31/20, Total U.S. – Convenience
CY 2019 Jan + Feb March April May
Category % Chg Category % Chg Category % Chg Category % Chg Category % Chg
Electronic Smoking Devices
71.1% Spirits/Liquor 16.6% Spirits/Liquor 23.5% Ice Cream/Sherbet 42.8% Spirits/Liquor 41.6%
Spirits/Liquor 15.4% Sports Drinks 14.3% Ice Cream/Sherbet 22.8% Spirits/Liquor 39.3% Ice Cream/Sherbet 37.8%
Frozen & Dry Ice 10.0% Frozen & Dry Ice 12.8%Smokeless Tobacco
12.6%Beer/Ale/Alcoholic
Cider21.1%
Beer/Ale/Alcoholic Cider
25.9%
Energy Drinks 9.5%Smokeless Tobacco
9.1% Frozen & Dry Ice 11.7% Cigars 20.1% Cigars 24.1%
Sports Drinks 7.4% Energy Drinks 6.8%Beer/Ale/Alcoholic
Cider9.9% Wine 15.7% Wine 17.4%
Smokeless Tobacco
6.5% Novelties - Fz 5.9% Cigars 5.3%Smokeless Tobacco
9.9%Smokeless Tobacco
10.7%
Salty Snacks 6.0%Non-Chocolate
Candy5.8% Wine 2.2%
Electronic Smoking Devices
0.8% Dried Meat Snacks 9.4%
Dried Meat Snacks 4.9% Bottled Water 5.6% Cigarettes 1.3% Cigarettes 0.7%Non-Chocolate
Candy8.5%
Pastry/Doughnuts 4.6%Beer/Ale/Alcoholic
Cider5.6%
Electronic Smoking Devices
0.3% Milk -2.5% Lighters 5.9%
Wine 4.4%Electronic Smoking
Devices3.9% Milk -3.4% Chocolate Candy -2.9% Chocolate Candy 5.6%
Edible
Nonedible
Alcohol
Note: CY 2019 WE 12/29/19. Source: IRI POS Data, IRI POS – Convenience. IRI Growth Consulting Analysis.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 23
LookingAhead
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 24
2.3 2.6
15.1
2.5 1.8
7.3
Expect Measured Channels’ CPG Sales
to Remain Elevated Through 2021, Driven
by Lingering Stay-at-Home Behaviors
CPG $ Sales % Chg. vs. YA Actual & Forecast –
Multi-Outlet (MULO+C)
Assumes no major national quarantine event after March–May 2020 / Source: IRI Strategic Analytics proprietary forecasting models, IRI Growth Consulting analysis.
EDIBLE
NONEDIBLE
~12-14
~9 to 11
2015-2018CAGR
2019
~3 to 5
2020Rest of
Year
2020 YTD
2021
~-4 to -6
~0 to -2
2020Full Year
~4-6
Actual Forecast
Key Factors
Localized containment if the virus spikes again; no national shut down
Fatigued by quarantine, consumers are going out again; out-of-home consumption occasions begin to recover• Retail and recreation mobility improved to -17% vs.
pre-COVID-19 vs. -50% at height of pandemic1
• Restaurant spending improved to -33% vs. ~-70% at peak2
• In-home cooking weariness• Foodservice reshape with more delivery, take-out,
drive-throughs and outdoor eating• Businesses and schools reopen
As economic stimulus and extra unemployment support run out / decrease, value seeking and in-home consumption increases
Work-from-home will be the norm for higher-risk and conscious segments and many white-collar workers (at least a few days / week)
2020-21 Sales Growth (2-Year CAGR)
Exceeds 2019 growth due to elevated in-home consumption
1. Google Mobility Report Total U.S. retail and recreation mobility as of June 12, 2020. 2. JP Morgan Chase Consumer Card Spending as of June 12, 2020.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 25
Grocery Growth Should Continue to
Outpace Other Channels in 2020 as
Consumers Continue Large,
Edible-Centered TripsCPG $ Sales % Chg. vs. YA Actual & Forecast – Grocery
Additional Factors
Continued preference for “one-stop-shop” (larger
Edible baskets and more frequent purchasing of
Nonedibles) to limit exposure when shopping
will benefit Grocery
2020-21 Sales Growth (2-Year CAGR)
Exceeds 2019 growth due to elevated in-home
consumption
Assumes no major national quarantine event after March–May 2020 / Source: IRI Strategic Analytics proprietary forecasting models, IRI Growth Consulting analysis.
EDIBLE
NONEDIBLE
1.3 1.7
20.6
1.3 1.2
18.2 ~16-18
~11 to 15
2015-2018CAGR
2019
~6 to 8
2020Rest of
Year
2020 YTD
2021
~-7 to -9
~-4 to -6
2020Full Year
~10-12
Actual Forecast
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 26
4.1 3.7
13.4
4.6 3.86.8
Expect More Muted CPG Growth in
Mass Even as Traffic Holds With
Value-Seeking Shoppers Additional Factors
Increasing need for value as stimulus lessens over
time will drive trips to Mass
However, Edible purchases shifting
more to Grocery and Dollar in one-stop-shop pantry stocking habits
2020-21 Sales Growth (2-Year CAGR)
Lags 2019 growth dueto likely shifts to Grocery
and Dollar channels
EDIBLE
NONEDIBLE
~9-10~6 to 8
2015-2018CAGR
2019
~4 to 6
2020Rest of
Year
2020 YTD
2021
~-3 to -4~-0.5 to -1.5
2020Full Year
~5-6
Actual Forecast
CPG $ Sales % Chg. vs. YA Actual & Forecast – Mass
Assumes no major national quarantine event after March–May 2020 / Source: IRI Strategic Analytics proprietary forecasting models, IRI Growth Consulting analysis.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 27
3.6 3.9
0.43.5 2.8 2.6
Convenience Is Likely to See Mild
Recovery as Mobility Returns, But
Weak Income May Limit Growth Additional Factors
People driving more starting to increase
demand for gas; also, preference for car travel
vs. air travel post-COVID-19
Construction recovery and increased demand for home improvement
projects will help sales growth
Yet, higher unemployment and lower disposable
income growth will limit Convenience store
traffic and sales
EDIBLE
NONEDIBLE
~1-2~2 to 3
2015-2018CAGR
2019
~2.5 to 3.5
2020Rest of
Year
2020 YTD
20212020Full Year
~2.5-3
Actual Forecast
~3~3.5
CPG $ Sales % Chg. vs. YA Actual & Forecast – Convenience
Assumes no major national quarantine event after March–May 2020 / Source: IRI Strategic Analytics proprietary forecasting models, IRI Growth Consulting analysis.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 28
The Transforming Retail Environment Opens Up Many New Opportunities
• Focused messaging to attract new shoppers, e.g., safety, value, easy
• Replacements for out-of-home activity,e.g., food and beverage entertainment bundles, partnership with restaurants for distribution for new meal experiences, including kits or prepared meals
• Increased general merchandise valued by consumers, e.g., DIY products, kitchen supplies, school supplies, etc.
• Safety: Assurance of personal safety, e.g., spacing, cleanliness, contactless payment
• Value: Assurance of best value, including price-matching
• Convenience: One-stop shopping and easy shopping experience, e.g., flexible delivery methods depending on sense of urgency, curated “discovery” kits for consumers to learn about and sample new products, multiple and personal touchpoints with retailers and brands
Retailer & Manufacturer Opportunities
OPPORTUNITY
Shopper Expectations
EXPECTATIONS
CPG Retail Shopping Experience
Expectations and Opportunities
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 29
Retailers Will Continue to Evolve /
Transform to Meet Emerging Shopper Needs
More agile & nimble planning / forecasting
to meet varied needs (e.g., local virus spikes,
plans for key “seasons” such as back-to-
school, fall baking, Thanksgiving)
Source: IRI Analysis.
Smarter in-store SKU rationalization
to meet the variety needs of most valuable
shoppers in a store leveraging loyalty and
POS data
More efficient transportation from
warehouse to store to meet omni-
channel demand
Perfect omnichannel fulfillment
strategies to meet shopper needs
and demand more profitably
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 30
With Surge in Online Demand, Winners
Will Overcome Short-Term Challenges
Source: IRI Weekly Surveys among IRI Consumer Network™ Panel representing Total U.S. Primary Grocery Shoppers – 4/24-26; IRI Analysis.
Click & Collect Opportunities
• Staffing and Infrastructure
Prep space, staffing and training expertise to
collect groceries, efficiency in collection
• Delivery Windows
Managing and ensuring inventory and tackling
out-of-stock situations
• Fulfillment
Retailers need to be nimbler vs. pushing
pickup dates to 3-5 days
62%of consumers stated
some items they wanted were not available to
order online
48%stated items ordered were
not delivered due to availability changes
21%couldn't get a delivery
time that was convenient
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 31
Winners Will Continue to Invest to Handle Online Demand
• Click & Collect expansions and/or implementation
accelerating
• Adjustments to capabilities and resources for
processing online orders in existing stores
• Enhanced partnerships with delivery companies
• Micro-warehouses within store or marginally
performing stores for fulfillment
• Expanding or adding drive-up areas
• Leveraging loyalty card data to digitally target shoppers
with visibility to localized store inventory in real time
Source: IRI Analysis
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 32
Insights and Strategic
Guidance for Better Decisions
IRI’s Online Resources Include Real-Time
Updates and Weekly Reports That Track
the Impact of the Virus on CPG and Retail
The IRI COVID-19 lmpact
Includes COVID-19 impact analyses, dashboards
and the latest thought leadership on supply chain,
consumer behavior, channel shifts for the U.S.
AND international markets
IRI CPG Economic Indicators Including the
IRI CPG Demand Index™, IRI CPG Supply
Index™ and IRI CPG Inflation Tracker™
Accessible through the insights portal
to track the daily impact of COVID-19.
This includes top selling and out-of-stock
categories across the country and
consumer sentiment on social media
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 33
The Latest COVID-19 Reports and Insights from IRI (click to see full report)
IRI COVID-19 IMPACT ASSESSMENT REPORTS LESSONS FROM THE GREAT RECESSIONTHE CHANGING SHAPE OF THE CPG DEMAND CURVE
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 34
IRI CPG Demand Index™
The IRI CPG Demand Index™ provides a
standard metric for tracking changes in
spending on consumer packaged goods. It
measures weekly changes in consumer
purchases, by dollar sales, against the year-
ago period across departments including fixed
and random weight products, grocery aisles
and retail formats. The IRI CPG Demand
Index™ is available for eight U.S. regions and
all U.S. states.
CLICK HERE FOR MORE!
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 35
The IRI CPG Inflation Tracker™ provides the
well-known price per unit metric for tracking
changes in pricing of consumer packaged
goods. It provides weekly changes in
consumer prices, price per unit against the
year-ago period across departments including
fixed and random weight products, grocery
aisles and retail formats. The IRI CPG
Inflation Tracker™ is available for eight U.S.
regions and all U.S. states.
CLICK HERE FOR MORE!
IRI CPG Inflation Tracker™
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 36
The IRI CPG Supply Index™ provides a
standard metric for tracking changes in
product availability (i.e., in-stock rates) in
stores for consumer packaged goods. It
measures weekly changes in product
availability against the baseline across
departments and retail formats. The IRI
CPG Supply Index™ is available for eight
U.S. regions and all U.S. states.
CLICK HERE FOR MORE!
IRI CPG Supply Index™
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 37
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Confidential and Proprietary. 38
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