Insights

Consumers Cut Back Retail Sales Change As Value Trumps All
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Consumers Cut Back Retail Sales Change As Value Trumps All

Sales of food and beverages have been more resilient than non-consumable goods during the economic downturn.  But according to Nielsen, consumers are changing the way they buy food as they seek to stretch their dollars farther.

Grocers, drug stores and mass merchandisers are seeing strong growth in store-brand items.  Unit sales of those items grew an average of 4 percent in the last six months of 2008, led by dairy, packaged meats, frozen foods, deli, dry grocery and beverages.  Meanwhile, branded items declined an average of 3.3 percent during the same period, with all categories except for fresh meat showing drops.

Unit sales during 2008 declined 1.3 percent across the store, with the largest declines among non-edibles.  Unit sales of health and beauty, non-food and general merchandise dropped 2.7, 3.7 and 6.7 percent, respectively.

Store brand sales continue to be strong, as consumers realize their quality and value, as well as the increased range of products available.  Nevertheless, store brand sales slipped slightly in the last month of 2008.  At the same time, sales of branded items declined almost across the board.

“Inflation and the weakening economy have led consumers to switch to store brands and to cut-back their total purchases. Additionally, they are cooking more at home and purchasing more staples than in the past,” said Todd Hale, Senior Vice President of Consumer and Shopper Insights at Nielsen.

Top 10 Categories % Dollar Growth
Flour 31.4
Dry vegetables & Grains 25.9
Pasta 25.5
Canning & Freezing Supplies 17.9
Shortening & Oil 16.4
Fresh Eggs 14.7
Cough Cold Remedies 12.8
Cheese 12.2
Butter & Margarine 10.9
Yogurt 10.7
Source: Nielsen Scantrack, a service of

The Nielsen Company (January 26, 2009).

Top 10 Categories % Unit Growth
Canning & Freezing Supplies 10.6
Wine 7.4
Vitamins 4.8
Fresh Meat 4.7
Dry Vegetables & Grains 4.6
Dry Mix Prepared Foods 4.4
Flour 3.3
Refrigerated Juices & Drinks 3.3
Salads, Prepared Foods – Deli 2.9
Frozen Novelties 2.8
Source: Nielsen Scantrack, a service of

The Nielsen Company (January 26, 2009).

“Nothing illustrates the consumer shift more than what categories showed the most growth.  In boom times (2004 to 2005), the top five sales leaders were dessert-dairy, men’s toiletries, tea, yogurt and bottled water.  In the period 2007 to 2008, the top five sales leaders were canning and freezing supplies, wine, vitamins, fresh meat and dry vegetables and grains.  Clearly the economy has shifted many consumers to a back-to-basics approach when it comes to eating,” said Hale.