Several consumer trends have proven resilient during the COVID-19 pandemic, according to stakeholders at Grocery 2022allowing retailers to better understand what consumers expect from private label products.
Claire Davies, Managing Director of LEK Consulting, detailed five resilient trends retailers should be aware of: convenience, changing demographics, better products for youESG and interest in private label due to inflation.
Davies said private brands were outpacing national brand growth before the pandemic hit in 2020, but the category is “really coming to life” as more consumers look to save with it. inflation persistent.
LEK data showed that 80% of consumers expect to change their shopping habits if inflation persists in the short term. 35% of consumers say they will switch to cheaper items and 20% say they have already switched to cheaper brands.
“You really have to look at ways to defend your position against private label,” Davies said, addressing all of the national brand reps on the consumer trends panel. “How can you differentiate and justify the price difference, as they [private brands] come after you.
Davies cited prepared foods as a category of consumer interest because they meet the need for easy and convenient meals and can often provide healthier options.
“We want healthy food and we want it fast, that’s what consumers are looking for now,” she said. “By offering prepared foods, it actually prepares retailers to bring consumers back into the store and fill their carts.”
Citing a recent survey, Davies said when retailers invest in their store, the majority improve and add space for prepared food offerings.
“Retailers are really investing in the prepared food space,” she said. “Prepared foods represent nearly 50% of what retailers invest in. That’s a 39% increase from last year…they’re investing in the perimeter. Things that are pre-prepared, like vegetables, pasta sides, things you find in the freezer aisle as prepared foods, are also doing very well.
Davies cited shifting demographics as a key trend retailers should also watch, noting that as America becomes more diverse, flavor trends change and demand for ethnic food products increase.
“Innovation is going to be key, we’ve seen such growth in ethnic flavored foods,” she said. “As retailers, you need to understand how you can attract diverse consumers to your store, bringing the right SKUs to ensure they buy with you, and how to retain traditional consumers. Addressing your assortment is key.”
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