September 28, 2020
REIGNITE IN-STORE MERCHANDISING EFFECTIVENESSIN THE GROCERY CHANNEL
PART 9 | COVID-19
The Changing Shape of the CPG Demand Curve
Read Other CPG Demand Curve-Focused Reports
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Executive SummaryCPG retail operations and the customer experience have taken some wild turns throughout the COVID-19 pandemic, including revising store layouts and instituting new cleaning protocols on the part of the retailer, and suspending or dramatically revising marketing and promotional activity on the part of the manufacturer, along with new shopping patterns and bigger baskets for consumers.
In this report, IRI looks at the impact COVID-19 has had on total food channel store display merchandising as well as strategies to help manufacturers and retailers navigate the future of display in the next normal.
The Transforming CPG Display Landscape• In-store display space has been significantly reduced as retailers enable social distancing.• High COVID-19 demand categories such as bleach, soap / beauty and beverage alcohol
are displacing traditional display categories such as cookies / crackers and candy.• Despite these shifts, contribution to sales from display has held steady vs. pre-COVID-19
and decreased only slightly vs. year ago.• Sales with features have softened, not keeping pace with display despite no significant reduction in activity.
Looking Ahead• As display space remains challenged, retailers and manufacturers will continue to refine merchandising strategies to maximize
lift by aligning the metrics that matter across display product mix, size, location and number with new shopping patterns.• Continual evaluation will be required to ensure the “right” categories get display space – merchandising strategies that
worked during peak stockpiling of mid-March and subsequent stock-up periods may no longer work as behavior evolves.• Ensuring all off-shelf merchandising efforts are in sync with weekly feature ad support will continue to be both a key
goal and challenge.
HOW CAN IRI HELP? IRI’s Enhanced Display tools can help manufacturers and retailers better understand trends and opportunities across the total store. IRI employs a collection force of 1,200+ highly trained auditors who collect display and causal data from IRI sample stores weekly.
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In-Store Displays Are Displaced to Accommodate Distancing: ~5 Fewer Displays
On Average vs. YA, with Both Edible & Nonedible Categories Experiencing Losses
Average Number of Weekly Displays per Store – Pre-COVID-19 vs. 7 WE 9-6-20 – Total U.S. Food
91.077.2
24.1
83.470.7
22.2
1.7 1.4
-0.5
-4.8
-3.6-3.1
NonedibleTotal Store Edible
Average Weekly Number of Displays per Store Displaying
Average Weekly Number of Displays, Absolute Change vs. YA
Source: IRI Total Store Display Audit / *Differing store counts by location causes totals to be nonadditive
Pre-COVID-19 8 WE 02/23/20 7 WE 09/06/20
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As Distancing Measures Require More Space in Store,
perimeter and In-Aisle Display Locations Are Being Squeezed
Average Number of Weekly Displays per Store by IRI Standard Location –
7 WE 9-6-20 – Total U.S. Food
3.9
10.311.7
13.1
2.8
13.2
30.6
0.1 0.10.2
Lobby PerimeterFrontEndcap
BackEndcap
AOEndcap
Promo/ Seasonal
In-Aisle
0.0 0.0
-1.7
-1.5
Source: IRI Total Store Display Audit / *Differing store counts by location causes totals to be nonadditive
Average Weekly Number of Displays per Store Displaying*
Average Weekly Number of Displays, Absolute Change vs. YA*
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General Food, General Merchandise Show Most Display Decline, While Number
of Beverage Alcohol Displays Continue to Increase in the Most Recent period
Average Number of Weekly Displays per Store by Department – 7 WE 9-6-20 – Total U.S. Food
Source: IRI Total Store Display Audit
EDIBLE NONEDIBLE
21.4
4.7
11.2
5.5 6.6
13.6
6.74.0
52.8
-0.9-0.1
-3.8
0.6
-0.7
0.5
-3.7
0.3
-0.8
HealthBeautyBeverage Alcohol
Beverages Frozen General Merch
General Food
Refrigerated Home Care
Average Weekly Number of Displays per Store Displaying
Average Weekly Number of Displays, Absolute Change vs. YA
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Traditional Top Display Categories, Including Cookies and Candy, Are Losing Space
to Bleach and Soap; Supply Chain Issues Impacting Decliners Like Paper Towels
Top and Bottom Categories by Number of Display (NOD) % Chg – 7 WE 9-6-20 – Total U.S. Food
0.6
-6.4
-0.9
-5.5
3.7
-3.9
Salty Snacks(General Food)
Bottled Water(Beverages)
Fresh Bread & Rolls(General Food)
Cookies(General Food)
Snack Nuts/Seeds (General Food)
CarbonatedBeverages
(Beverages)
Crackers(General Food)
Non ChocolateCandy
(General Food)
ChocolateCandy
(General Food)
-9.8
Beer(Bev Alcohol)
-13.8
-11.2
-10.8
TOP 10 CATEGORIESRanked on NOD
TOP 10 CATEGORIESRanked on % Change vs. YA
75.7
71.7
35.0
29.2
22.3
22.3
16.4
16.4
16.0
Premixed Cocktails(Bev Alcohol)
Soap(Beauty)
Home Health Care/Kits (Health)
Dough/BiscuitsRfg (General Food)
External AnalgesicRubs (Health)
Bleach(Home Care)
Baby Formula(General Food)
Hair Coloring(Beauty)
Liquid DrinkEnhancers (Beverages)
Cosmetics - Lip(Beauty)
1,115.7
-38.3
-64.5
Gastrointestinal Tabs (Health)
Popcorn / Popcorn Oil(General Food)
Dinners - SS(General Food)
Culinary(General Merch)
Cleaning Tools/Mops (Home Care)
Paper Towels(General Merch)
Baby Wipes (Health)
-47.7
-50.9
Moist Towelettes(Beauty)
-58.9
-41.1
Household CleanerCloths (Home Care)
-76.3
Facial Tissue(General Merch)
-41.1
-39.7
-38.2
BOTTOM 10 CATEGORIESRanked on % Change vs. YA
Source: IRI Total Store Display Audit
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As Most Departments Are Challenged with Diminished Assortment, Items Available
on Display Across All Departments Show Dramatically Weaker Trends
Average Number of Weekly Displays per Store by Department – 7 WE 9-6-20 – Total U.S. Food
Frozen General
Food
Beverages Beverage
Alcohol
Refrigerated Beauty General
Merch
Health Home Care
-2.9
-12.7
-5.2
-10.4
-4.1
-16.0
3.5
-10.5
-6.0
-1.5
-4.1-2.7
2.1
-2.1
-5 -5.2
-2.5
-14.8
Source: IRI Total Store Display Audit
Average UPCs per Display % Change vs. YA
Average Weekly Items per Store % Change vs. YA
EDIBLE NONEDIBLE
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Reduction of Displays Has Impacted All Top National Brand
Parent Companies, But Largest Erosion Is Among Private Label
Average Number of Weekly Displays per Store by Parent Company – 7 WE 9-6-20 – Total U.S. Food
10.7
5.64.6 4.2 3.9 3.4
23.3
-0.8
-1.5
-0.2-0.7 -0.7
Parent
Company B
-2.4
Private
Label
0.0
Parent
Company A
Parent
Company D
Parent
Company C
Parent
Company E
Parent
Company F
Source: IRI Total Store Display Audit
Average Weekly Displays per Store
Average Weekly Displays per Store, Change vs. YA
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The Contribution of Sales from Display Held Essentially Steady vs. Pre-COVID-19
and Year Ago; Importantly, Feature Contribution Now Lags Display
% Share of Dollar Sales by Merch Type – Pre COVID-19 vs. 7 WE 9-6-20 – Total U.S. Food
13.5 12.2
7.87.9
10.0
7.3
4.1
3.2
7 WE 9/6/20Pre-COVID-19 8 WE 02/23/20
35.4
30.6
Share Point Change vs. YA
-5.0
-1.0
-2.5
-0.2
-1.1
Source: IRI TSV Data Ending 9/6/20
Feature &
Display
Feature
Only
Display
Only
TPR
Only
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Feature Sales Are Soft vs. Year Ago Despite Maintaining
Frequency of Activity; Display Trends Are Thriving
Dollar Sales % Change by Merchandising Type –
Pre-COVID-19 vs. 7 WE 9-6-20 – Total U.S. Food
1.6
3.9
1.0
-0.8
1.5
-1.5
5.0
11.4
Temporary PriceReduction Only
FeatureOnly
Any Merchandising
DisplayOnly
Feature &Display
-14.9
-13.6
Pre-COVID-19 8 WE 02/23/20
7 WE 09/06/20
- - - - - - -0.04 -0.20 -0.24
($219) $289 $399 -$628 -$248
Source: IRI TSV Data Ending 9/6/20
Dollar Sales by Merchandising Type / % Change vs. YA
11.4
Weighted Weeks Change vs. YA / $ Change (000s) vs. YA
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Growth Due to Base Demand Is the Largest
Contributor to the Increase in Display Sales
Breakdown of Total Store Display $ Sales Change (000s) vs. YA, by Department – Total U.S. Food
Source: IRI Total Store Display Audit.
$1,002
-$227-$376
Incremental Display Dollars
$ Due to Incremental Dollars per Display Change
Difference in incremental sales per display vs. YA multiplied by the number of displays placed
Base Display Dollars
$ Due to Base Dollars per Display
Quantifies display sales generated by the change in base demand
Decline in Dollars Due to Fewer Displays
$ Due to Number of Display Changes
Average sales per display multiplied by the difference in number of
displays vs. YA
TOTAL = $399
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$3
$25$8
In Addition to Base Demand Gains, Beverages and Health
Departments Have Shown Improved Display performance
Breakdown of Display $ Sales Change (000s) vs. YA, by Department – Total U.S. Food
$11
$179
-$67
-$1
$56
-$16
-$148
$412
-$190
-$32
$96
$26
-$22
$94
-$55
-$44
$89
-$52
$6$14
$0
-$4
$19
-$11
General Food
$74
Beverages
$123
Frozen
$39
-$189.8
Bev Alcohol
$90
Refrigerated
$17
Health
$20
Beauty
$36
General Merch
-$7Home Care
$4
$ Due to Number of Display Chg
$ Due to Incremental Dollars Per Display Chg
$ Due to Base Dollars Per Display
Source: IRI Total Store Display Audit
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Implications for Manufacturers and Retailers
MANUFACTURERS
• As display space shrinks and categories such as cleaning take center stage, CPG manufacturers must work with retailers to drive more incremental opportunity via displays while balancing the need to highlight high-demand items.
• Understand the shifting role of display and determine the display metrics that matter to help drive performance and maximize ROI of trade and merchandising labor investments.
• Partner with retailers to identify relative lift of key categories on display to determine optimal focus areas as shopping patterns shift.
• Explore opportunities to increase variety on display as COVID-19-related streamlining eases.
• Temporary Price Reduction and Feature remain important activities, but to continue to move merchandising up the “lift ladder,” shift TPR to display, and ensure display compliance to features.
RETAILERS
• Social distancing measures are creating new pressures on sales and profit per square foot. Driving productivity of remaining display locations and space will be key moving forward.
• With declining feature-only lifts, ensuring adequate display allocation on feature items is a priority. Checking store compliance on display during feature weeks will be critical.
• Allocate display holding power to categories and items that can maintain supply and drive incremental sales.
• Consider extra drive period execution of traditional snack and beverage categories to maximize display productivity overall.
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IRI Offers a Variety of Solutions and Services to Help
Manufacturers and Retailers Understand Off-Shelf Merchandising
• Total store view of cross-category display presence by store location
• Largest total market view reporting of 300+ syndicated CPG categories and 200+ retailer or regional geographies
• Powered by the combination of POS data and display observations
• Provides category-focused view of expanded display measurement
• Detailed understanding of location, number and variety on display Compare results against prior periods, YAG and/or seasonal time frames
• Direct access within UNIFY to the entire category product hierarchy
• Ranks the order of importance and validates in-store drivers of sales and volume, highlighting execution priorities and blind spots
• Provides national guidance, creating a validated merchandising strategy for your portfolio
• Implement better KPI development to effectively measure key levers
Enhanced Display
Measures
Total Store Display
Metrics
That Matter
ACTION and IMPACT
• Provides clear understanding of merchandising strategy guiding in-store actions
• Redefines what it means to “win” the in-store environment
ACTION and IMPACT
• Provides clear understanding of key display variables, share and location
• Helps identify key display priorities to win
ACTION and IMPACT
• Category to UPC level solution
• Provides clear understanding of total display opportunities
• Identifies and prioritizes key display location targets
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Vivek Sankaran
President & CEO, Albertsons Companies
August 25, 2020
Ram Krishnan
Global Chief Commercial Officer, PepsiCo
August 17, 2020
Brian Cornell
CEO of Target
July 16, 2020
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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 and 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.
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The Latest COVID-19 Reports and Insights From IRI (click to see full report)
IRI COVID-19 IMPACT ASSESSMENT REPORTS RECESSION PROOF YOUR BUSINESS
THE CHANGING SHAPE OF THE CPG DEMAND CURVE
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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, all U.S. states, UK, France, Italy,
Germany and the Netherlands.
CLICK HERE FOR MORE!
IRI CPG Demand Index™NOW INCLUDES
U.S., UK, FRANCE, ITALY, GERMANY & NETHERLANDS
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The IRI CPG Channel Shift Index provides a
standard metric for tracking changes (migration)
in spending on consumer packaged goods across
select channels. The index measures weekly
changes in consumer purchases by dollar sales
and product trips against the year-ago period for
edible and non-edible products. The index is
available for seven geographies—All Outlets,
Grocery, Club, Dollar, Drug, Mass and Total E-
Commerce.
CLICK HERE FOR MORE!
IRI CPG Channel Shift Index™
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The IRI CPG E-Commerce Demand Index provides a standard metric for tracking changes in spending on consumer packaged goods purchased online. The index measures rolling quad-weekly changes in consumer purchases by dollar sales against the year-ago period across releasable edible and non-edible departments. The index is available for three channels--Total E-Commerce, Brick & Mortar E-Commerce and Online E-Commerce, and two fulfillment types –Click & Collect and Delivery / Shipment.
CLICK HERE FOR MORE!
IRI CPG E-Commerce
Demand Index™
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