The effects of the health crisis and teleworking on the shopping cart will cause the consumer market grows 5.7% in 2020, according to Nielsen forecasts presented at the AECOC Congress on Commercial Strategy and Marketing. Spending in the supermarket will slow down during the second half of the year by around 2.8%, very similar to that obtained in the weeks of 2020 before the health crisis. This forecast for the second half of the year, together with the growth of 8.8% registered during the first half, points to growth of the sector at the end of the year above 5%.
“The market must consider whether, given the consumer dichotomy, its portfolio of brands, varieties and formats is adapted and whether it can provide relevant innovation to both ‘targets’. We can have a good opportunity to make a strategic analysis of the assortment if we speak from the perspective of the distributor and to rethink the role of the brand within the category for the manufacturer. In short, this complex moment is also an opportunity to analyze the consumer value proposition. Sometimes a little ‘chaos’ comes in handy to order ‘inside the house’, says Nielsen Iberia’s CEO, Patricia Daimiel.
Daimiel has highlighted small local stores, discount stores and hypermarkets as the great winners of the de-escalation process. Furthermore, the growth of the mass consumption sector is related to the transfer of spending that was previously carried out in bars and restaurants and that is now destined for the home.
One of the traits that the consumer currently maintains is that of reduce the frequency of visits to the store (falls 10%), so the average ticket per purchase is also higher. By formats, the hypermarket channel recovers strength by offering larger spaces where you can make all your purchases at once, while “online” continues to grow at a rate of 70%. In fact, mass consumer electronic commerce has gone from being testimonial to having an unexpected role before the Covid-19 crisis, with growth peaks of up to 302% in the first moments of the crisis and a cumulative sales increase of 71.7% in the middle of the year.
In the category analysis, Daimiel has highlighted that items that played a major role during the first weeks of the crisis, such as toilet paper or canned goods, return to normalized sales levels, while hygiene-related products, such as gloves, disinfectants or hand soap, and confectionery have consolidated their growth in the new normal.
The aftermath of the health crisis will draw two large consumer profiles on which to direct strategies from the second semester: the well-off and the adjusted. The former is seduced by the premium trend, is a fan of the experience, buys more food at home or on the go and invests in technology. Instead, the lean consumer will look more at the budget, look for price and promotions, and will be more prone to brand disloyalty.
From Nielsen they conclude that the market will have to design a new price architecture, combined with a more efficient promotional strategy, not in vain the sale in promotion in Spain represents 18% of the total market, but only 29% earn money, compared to 48% of the whole of Europe. “At this point we already know that the way out of this crisis will not be V-shaped, it will be U-shaped and what we don’t know yet is how long the U-base will be,” they explain from the consultancy.
Another of the trends that will be reinforced is that of “cocooning”, which enhances the home as a refuge. In this way, 43% of Spaniards changed their cooking and eating habits at home compared to the time before the coronavirus.
Since Nielsen aims for 2020 as the most complex year to predict consumer behavior, since it is influenced by five elements that will determine how and where the Spanish will spend. These factors have to do with teleworking, with a potential of more than 20% in the employed population; the hospitality industry, with 23% of businesses still closed; the fall in tourism, when 84 million visitors came to Spain in 2019; an unemployment rate that can exceed 20% and consumer confidence that has fallen 24 points compared to 2019