By Jonna Parker, Fresh Center of Excellence, IRI
In CPG circles, many are pointing to Friday, March 13, 2020 as the date that marked the shift in consumer shopping behavior in the U.S. due to the coronavirus outbreak. This was the date when U.S. President Donald Trump declared a national emergency during his address to the country, the U.S. House of Representatives passed a bipartisan aid package for American workers, and grocery sales across the country began to explode to unprecedented levels.
Now that many consumers are four weeks into social distancing orders, panic buying has somewhat slowed and certain items now have restrictions on the number purchased, we are seeing significant changes across much of the store.
Of course, it has been a shock for some that the consumer trends that all of us have focused on for the past few years have seemingly disappeared overnight. Whether for self-care, convenience, sustainability or customization, consumers are currently focused on keeping themselves and others safe while shopping in the store, wrangling for a grocery delivery time online, figuring out how to feed everyone at home, and getting the items they need at prices they can afford in an economy that is suddenly facing several new and unique challenges.
Whether this new reality is permanent or lasts several more weeks or months, it’s important to keep monitoring the situation and doing so in a holistic way across all aisles, as now, more than ever, consumers see solutions, not silos.
At IRI, we’ve been saying for the past few years that it’s important to be looking at the total store – because impacts in one category ultimately will impact other areas. Consumers can only purchase and consume so much. You need to know how you fit into their solutions when they are at the store staring at the shelves or online looking for specific items for a recipe. It’s not just about specific categories, trade promotions and brands – it really comes down to consumers and baskets.
The most recent week of data (Source: IRI Unify Total U.S. Multi-Outlet syndicated point-of-sale data including both fixed and random-weight items, week ending 4/5/2020) shows that store sales growth increased slightly above the prior week, and consumers have been consistent with their grocery buying approach, with half continuing to purchase a two-week supply.
Consumer-perceived out-of-stocks have remained high for paper goods, with sales increases seen in protective gear such as gloves and masks. However, desired food categories were found by most consumers and more so than in prior weeks of the pandemic.
Consumers are also making fewer retail trips and showing loyalty to a specific store. According to the IRI survey data week ending 4/5/2020, consumers are less likely to go elsewhere as the pandemic continues. Only 35% changed stores to find what they needed, down from 44% at the beginning of the pandemic, while a higher rate (28% vs. 12%) went back to the same store later to find items when they were back in stock.
As consumers focus more on continuing to feed their families and less on immediate stock-up, food departments saw a share increase over the prior week while non-edibles slowed to less than 25% of store dollars.
Buying limits and the scarcity of in-demand items coupled with fewer trips drove pet, beauty and health departments to declines over 2019 with only paper goods and household cleaning products showing growth. However, this was much less than in March, as many have likely already stocked up on essentials and are delaying non-edible purchases that are not in critical need.
Shoppers remain focused on frozen and shelf-stable food items, which commanded 41% of store sales; this is +2 points from the year-to-date share average. Shelf-stable vegetables, baking ingredients, refrigerated doughs and frozen snacks all had above-average growth even four weeks into the pandemic. Dairy staples like butter, milk and eggs had strong sales despite buying limits, with demand generated by an increased need to home-cook and bake as well as a natural bump from spring holidays including Easter.
Fresh foods sales were driven by continued extremely strong performance in meat and above-week-prior sales in produce, baked goods and packaged lunchmeats. These items have become consistently needed to round out meals and snacks, especially with children and non-essential worker adults at home for all meals now. Versatile quick cuts like grinds drove beef to generate half of all fresh meat sales and volume, outperforming fresh chicken, including chicken breasts. Fresh turkey and pork also had strong above-average performance while ham buying started in the run-up to Easter.
Consumers are also seeking healthy options, and their demand for produce is strengthening as food service supply is redirected. Recipe and salad enhancers like tomatoes, peppers, carrots and mushrooms all had stronger growth. Easy-to-snack-on fruit also outperformed the prior week and year ago.
With consumer purchase behavior continuing to rapidly change, there are two key ways that CPG manufacturers and retailers can stay on top of these changes:
- See things from the shopper perspective using frequent shopper program/loyalty data and household panel cross-channel purchases. FSP and panel data will show you what consumers are doing, including all the shifts, connections and changes they are making amidst this unprecedented pandemic. That insight, what items are bought with other items and by whom and how much, is actionable in a new reality where solving the need is a new, unchartered world for CPG and fresh food marketers and retailers. Also critical will be survey data to show you how they feel. IRI’s latest weekly survey data (collected from the IRI Consumer Network® on April 3–5, 2020, and compared with results collected from surveys conducted in the previous three weeks) shows two-thirds of U.S. consumers are still “extremely concerned” about COVID-19, and shoppers who are extremely concerned increased their CPG spending by 28% over the prior month, compared with 8% for those who are only “somewhat concerned.”
- Look at total store data to make individual aisles easier to understand. IRI’s fresh food database shows connections between departments, providing a more holistic look at the entire store and where opportunities may be.
Having this type of information at your fingertips can keep you ahead of the curve and help ensure, even in a time when planning may seem impossible, that you have the right products on the right shelves, easing some of consumers’ concerns.
IRI Is providing ongoing analyses on how COVID-19 is impacting CPG and retail. Please reach out to your IRI representative if you have specific questions or visit our COVID-19 resource page, which has our latest reports, upcoming webinars and recent webinar replays, podcasts and a link to our daily data dashboard.