The Important Trends and Changes Happening Across Australia's Groceries and Supermarkets

New Research By IRI Has Revealed Some Important Trends In The World Of Groceries. Our Supermarkets Are Becoming More Food-Dominated, Healthier And More Sustainable.

Sydney, Australia – 5 September 2019
– Alistair Leathwood, Chief Commercial Officer, Asia Pacific, IRI®, a global leader in innovative solutions and services for consumer, retail and media companies, today announced the release of IRI’s latest Grocery and Pharmacy State of the Industry report and some of the interesting trends identified occurring across Australia’s supermarket sector.

“Traditional grocery retailers have always offered a mix of food and non-food products and achieved growth across both areas.   However, IRI’s latest industry insights reveal growth in packaged food products is far exceeding growth in non-food products,” Leathwood said today.

“Where packaged food sales grew by 2.3 percent over the twelve months ending May 28, sales in non-food products fell by 0.7 percent.   In fact, food growth outpaced non-food growth for 47 of the 52 weeks.

“General merchandise products like stationary, magazines and clothing have recorded notable sales declines. All general merchandise ranged products shed over $100 million in lost sales.”

According to IRI data, health and beauty products at grocery outlets are struggling to keep up with the growth of food products.

“Almost every category in health and beauty delivered a lower rate of growth relative to the total industry average. That said, we have seen some bright spots from select premium sub-brands that are delivering the superior beauty experience consumers now expect,” Leathwood said.

“The growth of dedicated beauty stores, both in-store and online, certainly has something to do with the comparative softness in supermarket health and beauty sales.  Stores like Priceline and Chemist Warehouse, as specialist retailers with a dedicated focus on health and beauty retailing, reflect the intense cross-channel competition that makes growing health and beauty products challenging for the major grocery retailers.

“In the case of My Chemist Retail Group, which includes Chemist Warehouse, we have seen a 14 percent increase in the number of Australian households that have shopped in the latest quarter to July, compared to the equivalent quarter in 2018. Interestingly, for context, that compares to a 7 percent uplift we recorded via our IRI Shopper Panel in the number of households shopping in Aldi.

 “Non-food products accounted for just three of the 25 fastest growing categories of packaged grocery products.  However, there are some areas of non-food growth worth mentioning. Garbage bag sales continue to grow, along with laundry liquids and pet food.

“Why are garbage bag sales increasing?   We believe it is because many people used single use plastic bags as makeshift garbage bags in the home and now with the removal of these bags from the market, shoppers are having to buy more garbage bags.  Annual unit sales accelerated by a massive 23 percent.  Is legislation helping the environment or changing the way we impact the environment as shoppers?

“Nappies and toilet paper sales lost ground.   It is our feeling that bulk purchase products such as these are more vulnerable than to being purchased elsewhere.”

According to IRI data, fresher and healthier alternatives to everyday products are experiencing strong growth.  More and more Australian shoppers are gravitating toward individualised products which cater to specific health ailments.

“Australians are becoming more and more aware of their own personal health, and what’s specifically good for them.  For example, A2 milk is experiencing strong growth.  Rather than accepting generic or home brands, people with digestive sensitivities are willing to pay a little bit extra for A2 milk,” Leathwood added.

“We’ve also seen health food aisles becoming more and more mainstream.  In fact, sales in health food aisle products has grown by $40 million over the past year, with growth coming in almost equal measure from private labels and national branded items.

“People find dedicated health food aisles to be a convenient and more approachable destination for healthy alternatives to everyday products.   Health foods  are becoming a serious substitute for the snacks we know and love, like chips and nut bars.

“Brands are definitely dialling up their freshness in order to appeal to customers.  Brands like Obela are driving fresh and organic premium dips. Juice outlet Boost, which prides itself on its freshness, is successfully infiltrating our shopping baskets with its range of store-bought juices. We actually think there is an ongoing opportunity for out-of-home brands to make an impact in the supermarket aisles.

“We’ve even seen massive growth in healthy alternatives to soft drinks.  Sales in Kombucha, (fermented and carbonated tea), grew by 188 percent over the past year. Naturally sweetened soda water is also doing well.”

Like other sectors, the grocery industry is being forced to change in response to a rising demand for sustainable and plant based products.

“High growth health and beauty brands often combine ‘good-for-me’ and ‘good-for-planet, and many are local too.  Within the Soap and Body Wash aisle, thankyou grew by 82 percent over the past two years.  All of thankyou’s products go to charitable efforts that aim to reduce poverty around the world,” Leathwood said.

“By borrowing the look and feel from premium brands, thankyou and Organic Choice are tapping into the wider market, whilst also making a difference in the world.

“Plant based yoghurt and ice-cream is experiencing major growth.  Non-dairy yoghurt brands like cocobella, nakuta and The Wise Bunny added $20 million dollars to the yoghurt category in the last twelve months alone.   The vegan movement is driving the introduction and growth of new brands and product lines across food and grocery retailers.

“The challenge for manufacturers and retailers is to understand what the opportunities and challenges are, and then how to address them. This is where the power of big data driven micro insights comes to the fore.   Scan data combined with IRI Shopper Panel data helps to put all the pieces together in to a perfectly formed mosaic road map of strategy and execution to harness and deliver growth.”

 

About IRI
IRI is a leading provider of big data, predictive analytics and forward-looking insights that help CPG, OTC health care organisations, retailers, financial services and media companies grow their businesses.  
 
A confluence of major external events — a change in consumer buying habits, big data coming into its own, advanced analytics and personalised consumer activation — is leading to a seismic shift in drivers of success in all industries.   With the largest repository of purchase, media, social, causal and loyalty data, all integrated on an on-demand, cloud-based technology platform, IRI is empowering the personalisation revolution, helping to guide its more than 5,000 clients around the world in their quests to remain relentlessly relevant, capture market share, connect with consumers, collaborate with key constituents and deliver market-leading growth.   Across the Asia Pacific region, IRI leads the industry in the delivery of state of the art solutions, market engagement and growth expertise and the execution of targeted, relevant, timely and outcome driven campaigns.  For more information, visit www.iriworldwide.com.
 


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