Changing consumer priorities

The FMCG market in the UAE continued to thrive in 2022, partly driven by the expansion of the expatriate population in the latter part of the year. However, FMCG spend shifted in a way that suggested a change in consumer priorities and spending behaviour.

People are shopping less often, but spending more, and the gap between the two widened throughout 2022. This was driven by a rising basket value which was sparked by the global pandemic and compounded by the war in Ukraine and inflation. At the end of 2022, spend per trip reached the highest level since COVID.

Shoppers prioritise food and home care

Despite the inflationary pressures, the FMCG industry grew in 2022. Spend on beverages tumbled by -4% and personal care by -5% due to shoppers shifting their spend to food and home care products, which grew by 5% and 7%, respectively. Dairy struggled the most and also experienced the biggest price rises. But not only are brands in the personal care and beverage losing out to other segments, they also face tougher competition and so it’s vital for them to adopt fresh marketing strategies so they stand out in the market.

It's time to take a fresh look at the traditional promotional strategy

Promotions no longer have the power they once had. Their impact has dwindled over the past two years leading many brands to cut their promotional spend. Alternative marketing strategies and tactics may produce better results, such as improving the in-store experience, enhancing the product offering, leveraging social media and influencer marketing, and personalising the customer journey through data-driven insights.

But while promotions declined, the popularity of online shopping continued to grow in 2022. Consumers purchased nearly 6% of all FMCG products online, showing a preference for larger pack sizes and higher purchase quantities compared to offline shopping.

Adapting strategy to changing shopper behavior and going online is essential for brand growth.

As the UAE economy faces a slowdown, it's becoming increasingly important for retailers and manufacturers to adapt their strategies to keep pace with the changing spending patterns of consumers. In particular, the growing popularity of online shopping is something that cannot be ignored - this trend has only been accelerated by the COVID-19 pandemic.

To succeed in this environment, better targeting is crucial. This could mean renewing the appeal of premium brands to affluent segments or offering the right product assortment and bundles to attract middle-class shoppers. By identifying and responding to the unique needs and preferences of different customer segments, retailers and manufacturers can position themselves for growth and success.

To access more data, download the report at the top of the page or contact one of our experts to discuss any of our findings.

During the first half of 2020, one week of lockdown cost the UK alone $412 million in lost spending on snacks and non-alcoholic drinks.

$995 million in the UK, $695 million in France, and $594 million in Spain in total was lost due to reduced OOH food consumption.

Lost spending on snacks and non-alcoholic drinks in one week of lockdown

Across the first half of 2020 (to mid-June) OOH food consumption fell. As countries emerged from the first wave of lockdowns, the transition to home working restricted the recovery in OOH spending. The fall in OOH food spending was not completely compensated for by the rise in grocery sales we have seen around the world.

Other findings from the study include:

• While non-alcoholic drinks consumption grew by 10% in 2020, spending is down by an average of 36% vs. 2019 as a result of the pandemic.
• OOH coffee sales in the UK dropped from $484 million in March to $68 million in April – a fall of 86%. By the end of August, the highest coffee sales volumes were still 50% lower than average 2019 volumes at just under $250 million per month – while coffee purchases for in-home use had risen by 17% to just over $109m per month.
• In urban environments in France, just 55% of consumers have used a home meal delivery service in the last year – and only 8% are using those services once a week, highlighting a clear opportunity for growth and recovery.
• The countries that have seen the least damage to their OOH sales seem to be those that have highest penetration of meal delivery services.

The European OOH food market has been more heavily affected than Latin American and Asian countries. One major driver of this is the high penetration of meal delivery apps and services in Asia and Latin America compared to European cities. Penetration of meal delivery services (among consumers aged under 50) in cities in South Korea is at 99%; it is 84% in China, and 80% in Brazil. This is compared to much lower penetration of 36% in the UK, 37% in Spain and 44% in France. Across the world, ‘enjoyment’ is cited by 59% of users (compared to 41% citing convenience) as the motivation for using home delivery apps, suggesting that food delivery is fast becoming a ‘small treat’ strategy for people in difficult economic times.

In the UK, meal delivery spending grew from $200 million per month in 2019 to $800 million per month in Q2 2020. UK meal purchases would have decreased by 70% from $5.4 billion to $1.9 billion in April, but meal deliveries compensated for some of the loss, leaving the decrease at 50% ($2.7 billion).

Home meal delivery has smoothed the economic impact of COVID-19 for some countries, creating an incremental opportunity as people seek small treats in difficult times. The industry is very established in Asia and Latin America and presents a good growth and recovery strategy in Europe. Investing in increasing the use of food delivery apps could help claw back lost revenue for cafes, takeaways and restaurants.

And we see lots of other opportunities for innovation: home delivery services have space to widen their offerings, especially in the drinks market and for traditional OOH brands to find ways to create opportunities for their brands to be consumed in the home.

Get the full picture by reading the complete report and watching the webinar in English or in Spanish.

Growth rates peaked in Wales, where restrictions were tightest, up by 15% in the month to 1 November.  Fraser McKevitt, head of retail and consumer insight at Kantar, explains: “Welsh shoppers increased their spending by an average of £10 during the week when the ‘firebreak’ lockdown came into effect.  The following week, online shopping in Wales hit its highest ever level accounting for 16.2% of the market.  In Britain as a whole, a record 5.9 million people purchased groceries online in the month of October.”

Early evidence suggests that consumers in England are confident about getting the essentials during the new lockdown – which started on 5 November – even if the restrictions impinge on festive shopping.  Fraser McKevitt said: “While there was some uplift in Wales, the increased spending did not provide any evidence of stockpiling, and initial figures suggest no sign of panic buying in England either.  But one thing is always front of mind at this time of year – Christmas – and it seems many people sought to get ahead with gift buying before stores closed.  Between Monday-Wednesday last week, the three days before additional nationwide restrictions were introduced in England, toy and entertainment stores took more than double their share of pre-covid footfall*, and shoppers rushed to gift shops and fashion retailers.”

The prospect of spending less time out and about during winter means people are hunkering down with seasonal comforts and making the best of life at home.  Sales of scented candles, pot pourri and essential oils for diffusers have grown by 29% compared with last year.  Meanwhile premium own label products are up by £56 million this month.  The category consistently hits its peak in December, so this could be an early indication of more to come as we approach what is likely to be an unusual Christmas.  Halloween was different this year as well, with shoppers celebrating at home, rather than on the streets.  The same amount was spent on pumpkins as in 2019 – £9 million – but sales of sugar sweets were 2.3% lower in October as trick or treating was put on hold.

Fraser McKevitt continues: “Frozen food has been a hot ticket since the beginning of the pandemic, and sales have risen by 14% in the latest 12 weeks.  That follows a spike in sales of fridge freezers over the summer**, showing the desire for long-lasting provisions in the current climate.  Iceland has benefited the most from the trend, helping to grow its market share to 2.3%, from 2.1% last year.  Overall, the retailer’s sales were up by 17.9%, and shoppers didn’t stop at the freezer section.  More was spent in Iceland’s chilled and ambient aisles as well, meaning the average spend per trip was worth 44% more than in 2019, the greatest increase of any retailer.”

Ocado was again the fastest growing retailer, with sales up by 36.1%, increasing its market share to 1.7%.   Waitrose meanwhile grew ahead of the market, by 10.6%, and its share rose for the first time since 2017 to 5.1%.  Waitrose increased its online sales faster than any other grocer this period.

Morrisons led the big four, growing sales by 11.4%, and expanding its share for the fifth month in a row.  It now accounts for 10.2% of sales, helped by its The Best premium own label brand, which grew by 42%.

Sainsbury’s sales rose by 7.6% this period and its market share currently sits at 15.3%.  The retailer recently announced it would permanently close its fresh food counters, a move which reflects a market-wide drop off in the number of people using in-store butchers, delis, and fishmongers.  Fraser McKevitt comments: “The number of supermarket trips involving a visit to the delicatessen, meat, or fish counter has fallen by 33% in the past 12 weeks, with many operations suspended because of the pandemic.  But that doesn’t mean shoppers are snubbing unpackaged, fresh products altogether.  In fact, the first national lockdown saw record numbers of people buy meat from other sources.  Over two million households have visited their local butcher in the past three months, 100,000 more than this time last year.”  

Asda increased sales by 5.0% this period and it holds a market share of 14.4%.  Tesco, which grew by 9.1%, maintained its share at 27.0% and had success through both physical and online sales.  Lidl’s growth accelerated to 12.5%, with market share up to 6.1%, while Aldi’s sales rose by 6.6%, and its share fell slightly to 7.8%.  Co-op increased sales by 8.6%, but its market share dipped to 6.4%, while independent retailers accounted for 1.9% of the market, as sales grew by 15.6%.

* Findings based on Worldpanel Plus, Kantar's panel of 80,000+ British shoppers recording all retail purchasing in all retailers. Daily footfall share index Monday 2 to Wednesday 4 November vs pre-March.

** Findings based on Worldpanel Plus, sales of fridge/freezers in physical stores, 52 weeks to 6th September 2020.

This is a sector that the consumer never truly gives up on, although one in which they do control their spending. This can be seen in the fact that throughout this year no shoppers were lost, in fact, the sector has gained 1.6% shoppers to reach 32 million.

The profound transformation of social habits led to major changes in shopping with consumers placing a greater focus on hygiene. Since the onset of the pandemic in Spain hygiene has grown revenues by almost 5% while beauty – consisting of perfume, skin care and cosmetics – has fallen by nearly 17%. Perfume and cosmetics have suffered the most due to their association with leaving the house.

The luxury segment has been among the worst affected, losing one-fourth of sales revenue and 20% of the shoppers they had in 2019.

Across Asia, we see different categories recovering at different rates:

• Growth categories: sectors that are doing better than before the pandemic due to increased awareness of hygiene, including bodywash, handwash and sanitiser.
• U-shaped recovery: necessities, including skincare and haircare, which endured a steep fall as occasions reduced, but are now rebounding quickly.
• L-shaped recovery: discretionary sectors that are taking longer to bounce back. Make-up in particular is still struggling, slowing the overall rate of recovery.

Non-food products continued to grow well, with home care products reporting an increase of 7.1% in sales value. Food and beverage categories saw a mixed performance, with packaged food’s growth slowing down in the recent quarter while dairy continued to do well.

Modern trade (including hypermarkets, supermarkets, and convenience stores) continued to decline, falling by 2.9% in the latest 12 weeks compared with last year. In contrast to the weak performance of hypermarkets, small/mini supermarkets continued their growth momentum by attracting more shoppers, recording a sales uplift of 6.3%. Ecommerce continued to soar, with rapid value growth of 41.3% in Q3, an even higher level of acceleration than last year.

In Q3 2020, ecommerce accounted for 25.8% of total FMCG spending in China.

Retailer performance in Q3

In the past 12 weeks, major retailers reported a lukewarm performance. Among the top players, Sun Art maintained its leading position thanks to RT-Mart’s performance, which recorded a market share of 7.3% (+0.1 ppts vs last year). RT-Mart was able to drive shopping frequency by tapping into both an O2O infrastructure and diverse store formats. Earlier this year, Sun Art Group planned to open 30 small-format community stores to meet the proximity needs in China. Despite the huge challenges to big-format stores, the reformed RT-Mart hypermarkets aim to attract younger consumers by providing ready-to-cook food and imported products, along with an efficient delivery service.

Local hero Yonghui maintained a robust growth of 9.4% in Q3, achieving a historic market share high of 5.0%. Since March, Yonghui entered the battlefield of live streaming, which is now playing a more crucial role in conversations with shoppers. Relying on its strong fresh food supply chain, Yonghui focuses more on building a closer connection with consumers and showing them the sources of production.

Online-to-Offline (O2O) continues to grow the market

In Q3 2020, 31% of Chinese urban households purchased through O2O platforms, lower than the level during the peak of the pandemic. However, in the post-COVID era, O2O traffic has been continuously growing, especially in northern cities and provincial capital cities, indicating that Chinese consumers have become more accustomed to it. Categories such as carbonated drinks, packaged water and juice have led the O2O market traffic growth over the summer months.

Among the top players, RT-mart, Wal-Mart and Yonghui contributed the most, while Vanguard and Wu-Mart (with Dmall) grew traffic. Kantar Worldpanel also observed that retailers with a higher contribution from O2O are more likely to have a stronger competitive advantage in their current shopping environment.

Online kept growing penetration but sales growth slower than Q2

In the latest 12 weeks ending 11 September 2020, 72% of Chinese household bought FMCG online. In recent months, lower-tier cities enjoyed the fastest penetration growth caused by the strong performance of Alibaba group and Pinduoduo.

Alibaba continued to grow the most, with a significant penetration uplift of 13.4 ppts versus the same period last year. It worth noting that in recent months, Taobao has been accelerating its progress in attracting new buyers. Since March, Taobao launched a special version to directly compete with value players, like Pinduoduo, while tapping into the strong manufacturing capacity in China. On the other side, Pinduoduo sped up their recruitment of buyers. Its penetration reached 16.5% in Q2, up by 9.6 points vs last year, further narrowing the gap with JD.com.

In Q3 2020 iOS grew by +6% points YoY and Android grew in China (+5.0% pts.) and Japan (+3.7% pts.). In all other reported markets OS shares are stable. However, beneath the surface of stability, while iPhone holds flat, shares among Android brands are shifting. Mid-tier manufacturers Xiaomi and Oppo are gaining in EU5 markets and Japan while Huawei declines YoY. That said, Huawei continues to experience strong growth locally in China by 5.7% pts. Samsung too, has not escaped the growing popularity of Xiaomi and Oppo, gaining share only in Japan (+5.4% pts.). Mid-tier smartphones also continue to attract consumers YoY. In the latest quarter across all reported markets, the iPhone SE, Samsung A series and/or Xiaomi all feature in the top 5.

Online sales shares continue to grow YoY across all markets, except in China where this channel is flat. Although, in recent months online sales shares of smartphones in France, Germany, Italy and China are starting to come back down to pre-COVID levels. Nonetheless, ecommerce is an important channel and is here to stay; in Great Britain, Spain, Japan, Australia and the US, where online shares in the month of September 2020 remains higher than pre-COVID (February 2020). Therefore, a strong online presence and positive customer experiences through this channel is critical now and in the future.

With many announcements and upcoming releases, such as the Samsung S20 FE, Google Pixel 5 and the launch of iPhone 12 flagship range, Q4 2020 is set to be a very exciting quarter.

Apple’s offering of 4 models in this year’s line-up is a very interesting strategy, particularly in the premium-tier price range (one tier below super-premium) with iPhone 12 mini.

Unlike previous flagships, iPhone 12 mini gives customers all of the latest specifications and 5G capability, but in a smaller form factor at lower cost, in-line with many areas of market growth. While share growth over the last couple of years has been for larger screen sizes, Apple is tackling both ends of the spectrum with this launch, as at least a third of smartphones owned in all markets except China have a screen size less than 5.5” and over 12% buyers chose their model specifically for “how it fits in my hand/pocket”.”

As more 5G-enabled devices launch, “5G capability” as a reason for choosing specific models bought, although still small relative to other drivers, has increased across all reported markets since Q4 2019, particularly in China increasing by 23% pts. Among customers who plan to purchase a smartphone in the next 6 months, at least 45% across all markets intend to buy 5G; the highest being in China at 89% followed by the US at 69%. Commercially, the benefits of 5G is being marketed as delivering high speeds and uninterrupted connectivity to support activities such as gaming, streaming video on demand and video calling.

5G can offer support to improve consumer experiences in the day-to-day activities they use their smartphones for. That said, how consumers value this is an area we will understand better as the market evolves. In the latest quarter, based on how smartphone owners used their devices daily to every few days, we observed increased usage of GPS QoQ in EU5, Japan and China as countries slowly started to open up more businesses and relaxed lockdown rules. In the last month, the proportion of consumers using their smartphone for streaming video services increased YoY (except in Spain and Japan), at least 1 in 3 are playing games and 1 in 5 have streamed music from their smartphone.

While growth over the past three months has slowed compared with the dizzying heights of lockdown, we still spent over €100 million more on groceries in the past four weeks versus this time last year. We expect to see a further boost in spend as restrictions tighten.

With Dublin under a Level Three lockdown since mid-September, consumer trends in the capital could paint a picture of what’s to come for the rest of the country as more measures to control the virus come into force. Dublin saw the strongest regional growth this period, increasing sales by 19.4% and contributing an additional €48.2 million to the total market year on year. Restrictions on pubs and restaurants meant sales of alcohol soared by over 53% in the past month. Shoppers returned to lockdown pastimes including recreating restaurant and holiday favourites at home, with sales of international ingredients rising by 25%. Unsurprisingly, hygiene was at the forefront of Dubliners’ minds, and antiseptics and disinfectants sales were up by 67%.

Lidl’s strong store footprint in Dublin helped it achieve the fastest growth of all the retailers this period at 19.1%, as shoppers in the capital spent an additional €57.3 million in store. Aldi grew sales by 11.0%, largely driven by customers buying more and spending an average of €36.46 more per shopper in the latest 12 weeks.

Following the record-breaking growth seen last period, online grocery sales remain high, increasing by over 75% in the four weeks to 4 October. Though a climbdown from the record jump of 128% that we witnessed in September, shoppers are continuing to make use of delivery services and online orders were worth an additional €18.7 million this period compared with last year.

Dunnes has significantly expanded its online capabilities in October and now joins SuperValu at the top of the table with both retailers claiming a 21.9% market share. Larger trips contributed an additional €63 million to Dunnes’ overall spend, while shoppers picking up 13.3% more items in store in SuperValu helped it to grow ahead of the market at 15.6%.

With just a few months to go until Christmas, retailers have been introducing deals on products like seasonal chocolates and advent calendars. While the grocers are feeling festive, it is a different story for Irish shoppers. There is a lot of uncertainty around what Christmas will look like this year and as a result people’s behaviour is very different from what we would normally expect. In the latest three months consumers spent €1.8 million less on tubs and tins of chocolate than this time last year.

But that’s not to say we have lost our sweet tooth. The trend of seeking out little luxuries while we’re all spending more time at home has continued. Nine in ten Irish households purchased chocolate almost every week over the past three months.

Tesco holds a 20.9% market share this period. Growth was driven by shoppers adding extra items to their baskets, with volumes up 21%, and the percentage increase in average spend at Tesco was the highest among all the retailers.

• Amazon Prime Video secured more than half of all new SVoD subscriptions in the quarter driven by an increase in Prime Membership
• 12% of new subscriptions were switched, meaning they were taken by households who cancelled one SVoD service to make way for another, +2% point vs. Q1 2020
• Subscription slowdown continues – as just 3% of UK households take on a new subscription
• Netflix provides 4 of top 5 ‘most enjoyed’ shows
• AppleTV+ share is fairly flat at 2.7% of new additions in Q3

Results from our Entertainment on Demand service for the three months ended in September showed that NBC's full launch of its Peacock streaming service allowed it to capture more than 17% of new video on demand subscriptions. Based on a longitudinal panel of 20,000 consumers and boosted by 2,500 new subscriber interviews each quarter, the Entertainment on Demand service is designed to help the broadcast industry and investors understand the full consumer journey for digital video subscription services. Other findings from the quarter included:10% of new subscriptions were switched, meaning they were taken by households who cancelled one SVoD service to make way for another, +1% point vs. the second quarter included:

• Amazon Prime Video dropped to #2 spot among new SVoD subs, with 16% share in the quarter, down from 23% the previous quarter
• HBO Max continued to see steady growth with 11.3% share of new SvoD subs
• Netflix & Disney saw share of new subscribers under pressure as the newer launches of Peacock and HBO Max grabbed consumers attention

Peacock hit the market with a number of compelling price options, including offering Peacock Premium at no extra cost to certain Xfinity customer plans. Value for money was the top individual subscription driver for Peacock, followed by the ‘variety of TV series,’ alongside ‘specific content,’ which was cited by 25% of new subscribers as their primary motivator for joining. Among those who cited specific content as their motivator for joining, Psych and Yellowstone were the top two titles. Early indications from consumers towards the Peacock service are broadly positive with an overall Net Promoter Score of +9, but it’s notable that this dips just to +1 among those utilizing Peacock Free. We will be closely monitoring the numbers of consumers upgrading to the premium tier over the next few quarters. By comparison, Netflix's NPS is +51. 12% of Peacock subscribers noted issues with buffering speed/loading time, double the market average. Looking ahead to the fourth quarter, a further 15% of households say they are considering signing up to Peacock.

Despite multiple competitor service launches over the past two quarters, Hulu has shown remarkable resilience, with share of new SVoD additions remaining essentially static at 10% and overall subscriber numbers edging up in the third quarter. Cord-cutting remains a key draw to Hulu, with 45% of the services subscribers holding cable TV vs. an SVoD market average of 53%. Hulu performs strongly in new sign ups via bundle deals, with the Hulu/Disney+ bundle and partnerships with Verizon Fios proving effective.

Amazon Prime Video continues to show strong subscriber growth, buoyed by uptake of overall Prime memberships, up from 52.3% of U.S. households in the first quarter to 54.5% in the third quarter. The heavily promoted ‘The Boys Season 2’ came out as the #1 title most enjoyed across all SVoD subscribers in the third quarter, helping boost Amazon further. Amazon also saw a significant boost in interface satisfaction from the rollout of household profiles to its subscribers in the third quarter, with Amazon Prime Video ‘Ease of Use’ net satisfaction now almost equal to Netflix. 

AppleTV+ share of new SVoD subscribers fell in the quarter to 4.9%, though overall subscriber numbers continue to edge up. Apple continues to play to its strengths and consumers rate the TV interface very highly, but overall advocacy levels are brought down by more negative views on number of new release films and number of classic films. Planned cancellation is higher than the industry average and among those who plan to cancel, 26% state they are not prepared to pay once their free trial is over – a key challenge Apple is likely seeking to overcome by announcing a three month extension to the a 12 month trial of AppleTV+ with a hardware purchase. 

Netflix dominated the list of most enjoyed content over the quarter with Lucifer, Ozark and The Umbrella Academy all making it into the top 5 titles during the quarter. Despite share of new subscribers falling to 8.3%, Netflix churn rate remained low at just 4.1% quarter-on-quarter, meaning overall subscriber numbers were essentially flat. 

Fraser McKevitt, head of retail and consumer insight at Kantar, says: “Shoppers are moving a greater proportion of their eating and drinking back into the home.  This is likely a response to rising COVID-19 infection rates, greater restrictions on opening hours in the hospitality sector, and the end of the Government’s Eat Out to Help Out scheme.  Alcohol sales alone were worth £261 million more to the grocers this month than last year, with pubs, bars and restaurants limited by the 10pm curfew.”

Despite an increase in COVID-19 transmissions and tightening restrictions, there is only limited evidence of consumers stockpiling goods at a national level in the past month.  Fraser McKevitt continues: “The seven days from Monday 21 to Sunday 27 September were the busiest since March, with 107 million trips recorded, but that number was nowhere near the 175 million seen just prior to the first national lockdown.  That said, sales of toilet roll and flour rose by 64% and 73% during the week, showing that consumers were wary of potential new restrictions.  37% of households bought toilet roll in that time, compared to the more typical 25% the week before, meaning increases were down to a greater number of buyers, rather than people packing trollies.”

Online sales in the past month were up 76% on a year ago, with one in five households ordering groceries via the internet.  The proportion of sales made digitally remains unchanged from last month at 12.5%, suggesting that many shoppers are choosing to stick with deliveries as the pandemic develops.  Ocado has benefited from the trend, growing its 12-week ending sales by 41.9%.  Fraser McKevitt comments: “Ocado has increased the number of shoppers using its service in the latest period – the only retailer to do so – adding 22,000 customers.  Its new partnership with Marks & Spencer is no doubt part of the appeal.  Since it started to sell M&S products on 1 September, two-thirds of Ocado shoppers have ordered Percy Pigs at some point, including an introductory period when the famous sweets were included free.  Ocado’s share of the market rose this period by 0.4 percentage points to 1.8%.

“Waitrose is keeping pace with its own online offer.  Although starting from a relatively low base, it was once again the fastest growing retailer online this month.  Waitrose also increased sales through its physical stores, with overall sales increasing by 8.9%.”  

Lidl has been in continual double-digit growth since December, accelerating its rate in the past 12 weeks to 11.7%.  Iceland, which is marking its 50^th birthday in November, also had cause for celebration, as growth of 17.3% took its market share to 2.3%.  Aldi recorded growth of 7.8%, and currently holds 8.0% of the market.

Changing personnel was the major story for Tesco and Asda in the latest period.  Fraser McKevitt comments: “New Tesco CEO Ken Murphy took over the reins at Britain’s biggest supermarket in October, with positive news to report – Tesco maintained its market share year on year for the second period in a row.  It now holds a 26.9% slice of the market – backed by sales growth of 9.2%.  Frozen, an early focus for the retailer’s Clubcard-only promotions, was the single fastest growing food category for Tesco.  Asda, which welcomed new owners this month, saw sales grow by 5.4%, but its market share fell to 14.4%.”    

Morrisons also gained market share, up by 0.2 percentage points to 10.1% on the back of 11.5% growth, while Sainsbury’s increased sales by 6.8% and posted a market share of 14.9%.  The convenience channel, which was vital to shoppers early in the pandemic, has seen annual growth rates fall back in line with the market.  The single biggest operator, Co-op, held market share at 6.6%, with growth of 9.3%.  

Holistic well-being

The pandemic has directly impacted the consumer’s view of well-being, pushing them to pay more attention to the quality, nutritional and immunity benefits of food. This has led to a demand for particular foods that should be consumed for nutrition and those that avoid sugar and fat.

Dairy and plant-based dairy alternatives have benefited from the consumer’s focus on nutrition. Milk in particular saw strong growth from March to May this year due to the immunity benefits of the lactoferrin found in it and recommended by famous disease experts.

Low and zero sugar beverage products, particularly popular among young consumers, are growing. New star brands, including those produced by Yuanqisenlin, are promoting the concept of zero sugar and fat for zero burden. Classic brands like Coca-Cola and Sprite are also promoting fiber+ for health.

The notion of health has evolved from just physical health to also include mental and spiritual health. Brands should communicate from a holistic platform of general well-being.

New habits and back to normal

There is an interesting mix of new habits and a desire to return to normal. On the one hand, those who started cooking more in the pandemic seem likely to keep up the good work. Categories which grew in lockdown, including seasoning products, soy sauce and oyster sauce, all maintained double-digit growth after the pandemic. A related trend was using more cheese and butter to cook tasty food, resulting in a 60% year-on-year surge.

During the pandemic drinks like Coca-Cola grew as a ‘happiness water’ to deal with stress but even after the peak of the outbreak this category still soared by more than 20%. It has become a necessity for consumers at this time.

Some categories like ice cream used to have a peak season in the summer while people were outdoors but home purchasing has become a trend this year.

The categories that consumers can stockpile because of long shelf life or necessity such as bread, instant noodles and frozen food grew in lockdown. It seems that they have continued to maintain their stock afterwards as these categories are still enjoying positive growth.

The categories which suffered a lot in lockdown such as alcohol, coffee and Chinese pastries, have had a recovery in the post-pandemic era as consumers try to resume ‘normal’ life.

While there is a new normal now, it’s complex with consumers really keen to go back to the normal they once knew but taking some new habits with them. Brands need to understand this state of mind in their communications.

Revive Out-of-home

Out-of-home refers to all occasions that the consumer purchases out of the home and it is a really important market for food and beverages. With lockdown and many things closed, it has suffered with only milk, ice-cream and CSD seeing positive growth.

While there are less OOH opportunities in the current environment, there are some key occasions that can be focused on. The key to revival in this market is to capture the heavy buyers. Kantar data shows that 73% of OOH heavy buyers in 2019 still remain heavy buyers in 2020 and they accounted for 40-60% in categories ranging from on-premise beverages to packaged beverages.

There are currently three occasions for these heavy buyers to purchase more: the workplace, family gatherings and outdoor shopping. Within this there are two key drivers, health and self-indulgence. Brands such as Coca-Cola are adapting well to this by switching their communications from large gatherings to drinking occasions in the workplace as a reward after working hard.

Focusing on the workplace occasion and the young – whose consumption has recovered quite quickly - is what brands need to do now, while also preparing for the return of the entertainment industry once the pandemic is over.

Online-to-offline

Online-to-offline is where a shopper can find out about, and even purchase, a product online before collecting it in a store. In 2019, 57% of urban families bought FMCG via O2O, with 5.5 trips on average a year and 107 yuan per trip. On average people are willing to pay 30% more on O2O compared to a store trip. The driving force for this is convenience and the ability to get all the shopping from one place. China is different from other countries in the respect that their online platforms make the full range of brands and categories all available in the same place

The pandemic will positively impact the overall O2O service and it is a very important channel that brands need to make sure that they understand and exploit appropriately if they are to grow.

The lipstick effect

The shopping festivals have helped to grow big brands at unprecedented level. Although these were heavily discounted due to the promotions, people have been able to buy more high-end brands through these events. We are now seeing a version of this translating into FMCG.

Recently Tmall.com published the top 10 beverage brands of the year and they shared a common feature: relatively higher price with attractive packaging aimed at the young.

These brands have captured the new lipstick effect in the food and beverages market. Although they are not cheap, they can still quickly go viral on the back of e-commerce and social media which attracts more consumers.

Therefore, in the post COVID-19 world both value and the lipstick effect will co-exist, providing a great chance for development as long as brands find a suitable positioning.

During the latest outbreak, economic activities involving food, technology and the environment are proving to be the most resilient and some have even become stronger as a result of the situation.

At the other end of the spectrum, the out-of-home, beauty and clothing sectors will have to wait until 2021 before growth surpasses 2019 levels. So what are our forecasts for the year ahead?

Year-end forecasts for 2020 and 2021

FMCG will end the year with 14.7% annual growth, one percentage point higher than the rest of the year. This is down to people buying more due to the fear factor, partial confinements, the continuance of remote working and the arrival of Christmas campaigns.

The out-of-home and clothing sectors saw respective drops of 38.1% and 30.6% in the year to mid-August, compared to 2019. These figures could see an increase by the end of the year. Although the potential of new coronavirus outbreaks may slightly shrink the results for the beauty sector, this does not rule out a year-end closure of -4%, which would indicate some recovery.

Within FMCG, the beverages sector is predicted to come out on top at the year end, while the fresh food category will continue to demonstrate a positive trend, as will packaged food. Indications are that pharmacy products will maintain their high growth.

Brand type is seen to be a common factor related to growth. Forecasts indicate that manufacturer brands will close at the same levels as FMCG (+14.7%), which is higher than retailer own-brands (+14.3%) although they have narrowed the gap.

Retailer trends are predicted to remain consistent for the rest of the year, with the online channel and regional supermarkets set to come out as the biggest winners.

Kantar’s forecasts also signal a return to normality for the contributions of families, which have returned to 2019 levels, with the exception of those for senior citizens.

The questions of how and why we consume have been other key aspects of 2020. Compared to the previous year, a 10% increase in consumption at home is predicted, which above all will benefit main meals. 

Next year we’ll also be talking about a growth of around 9.4% compared to 2019, and this will be a year that will show a pseudo-normality between the level year of 2019 and the exceptional year of 2020.

Modern trade (including hypermarkets, supermarkets, and convenience stores) fell by 2.9% in the latest 12 weeks compared with last year. Small supermarkets continued their onward march with rapid growth of 7.3%, while hypermarkets suffered a more serious challenge with value decline of -7.1%.

Among the top players, RT-Mart maintained its leading position with 7.2% value share, recording an increase of 0.1 ppts compared to last year, driven by both larger basket sizes and increased shopping frequency. Lower-tier cities were their strong growth engine with a value growth of 4.7%. As well as the strong expansion of proximity stores, we have recently seen the first medium-sized store which opened in Changzhou. RT-Mart Super is aiming to deliver more daily fresh products and offer an improved shopping experience, such as free cooking recipes and a service bell on the shelf to differentiate it from other formats.

Another of the biggest brands, Younghui, maintained its double-digit growth over the last three months. According to the latest financial report, Yonghui’s revenue increased by 22.7% in the first half of 2020. Among the regional players, the Spar group showed the most outstanding growth, reaching 17.9%.

Ecommerce continued its prominent value growth of 43.5%, as Chinese consumers become even more accustomed to shopping online since lockdown. Over the last 12 weeks, 72.3% of households in urban China purchased FMCG online, which is a significant uplift in the shopper base. Alibaba remained on the front foot with a 45.8% online market share (+1.7 ppts), while JD showed a slight decline of -0.2 ppts. Among the top players, the Alibaba group showed the strongest penetration growth at 13.9 ppts, followed by Pinduoduo at 8.8 ppts. Pinduoduo recently launched its new community group-buying project, Duoduo Maicai, the aim of which is to increase MAU (monthly active users) through fresh food, which has high demand paired with high consumption frequency.

In terms of sub-sectors, fresh and packaged food are the market’s main drivers, while household and personal care products have seen the biggest growth by volume, having risen by 15.6% compared to the same period last year.

Another conclusion drawn by the Kantar study is that, following lockdown, Spaniards have not returned to their old shopping habits. Shop visits have fallen by 3.3% but shoppers are continuing to fill their baskets more and more with each trip.

Multi-channel shopping is here to stay in 2020, with consumers opting for local retailers and internet shopping, the two clear winners this year, having respectively recorded a 1.2% and 0.7% increase in market share, compared to 2019. In fact, ecommerce has enjoyed a record high, the growth experienced in the last 12 months is the same as that predicted over a three-year period.

Shifts in the retail landscape

Although Mercadona continues to be the biggest player in the new normal, for the first time in its history it has lost ground to other retailers, like Lidl, which has seen the biggest increase in market share. And Mercadona is not alone, as Spain’s other top three retailers have also seen their market share diminish. This includes Carrefour, which has consolidated its position as Spain’s second-biggest player with the recent acquisition of Supersol, and DIA, which, following growth recorded during lockdown, has now fallen back to a market share comparable with the beginning of the year.

Regional supermarkets have enjoyed exceptional growth in 2020, expanding beyond their classic offering of fresh food. Almost all local supermarkets have recorded their best numbers ever this year, standing out in the minds of a consumer who is increasing opting for a variety of alternatives across all sectors.

These figures show that new retail scenarios are emerging in which local retailers and the online channel are set to play a more significant role. Innovation, advertising, promotions and the creation of new shopping patterns will be key to helping retailers through a time of crisis like the one we are currently experiencing.

Grocery sales over the past 12 weeks remain significantly higher than pre-pandemic levels, but compared with April and May shopping routines are much closer to what we would usually expect. For example, people are visiting grocery stores more frequently than they have since June, at an average of 19 times over the course of the past four weeks, indicating an increased sense of security among shoppers since face coverings were introduced at the start of August.

However, it’s a slightly more nuanced picture when we look at what the latest four weeks of sales might mean for the market going forward. An additional €19 million spent on groceries during the past month coincides with the start of a number of local lockdowns. This suggests that local restrictions are already making their mark – with people in certain parts of the country spending more to stock up on food and drink to consume at home.

Looking ahead, ongoing local restrictions are expected to continue to disrupt shopping patterns across Ireland.  Emer Healy continues: “In the latest 12 weeks, Dublin has seen the strongest growth of all the regions, with shoppers in the capital spending an additional €141 million on groceries compared with last year.  It will be interesting to see what effect the local lockdown could have on grocery sales as shoppers navigate new restrictions.”  

Despite some economic uncertainty, brands have once again proved to be standout performers, growing ahead of the market by 18% and outpacing private label sales year on year as shoppers spent an additional €205 million on branded groceries. Among the retailers, Lidl and Aldi both saw strong growth in branded sales, which grew by 48% and 36% respectively.  Lidl was also top of the table in terms of overall growth rate in the latest 12 weeks, growing by 21.2% year on year to boost its sales by €63.3 million. Aldi holds a 12.6% share of the market this period, with growth driven by an increase in volume per trip and higher average prices.

The popularity of online grocery shopping continues, and online sales grew by 121.7% over the latest four weeks. This represents another month of record-breaking growth for the online channel and digital sales added €72.9 million to the total market in the latest 12 weeks. New shoppers accounted for almost a quarter of the €133.6 million spent on online groceries during that time. Boosted by comprehensive online offers, SuperValu continues to grow ahead of the market and holds the biggest share of spend at 22.1%, while Tesco registered a 21% market share. Higher average prices and larger trip size drove growth for Tesco this period.

All the retailers benefited from the reopening of schools this September, which was a significant step toward normality after an extraordinary summer. Parents preparing for their children’s return to the classroom stocked up on easy breakfast and packed-lunch options, with sales of baked morning goods up 11% and lunch box staples like yoghurt drinks and juices growing by 17%. One marked difference this year is that facial tissues and wipes have become a must-have for children’s backpacks, growing by 2% and 15% respectively.

With many returning to the school run and the office commute, easy and convenient dinners are firmly back on the menu. Shoppers spent an additional €6.8 million on chilled convenience products, €2.7 million on ready meals, and sales of frozen prepared foods soared by €9.7 million year on year.

Dunnes in particular cashed in on the back to school trend as households with children increased their spend in the store by 9% and the grocer performed the best of all the retailers in sales of many typical packed lunch items. Dunnes now holds the second highest market share of all the grocers.

With $1 in every $5 spent on fast moving consumer goods (FMCG) coming from an environmentally conscious consumer, investment in sustainable innovation will help brands win a growing Eco-Active consumer group.

As the COVID-19 pandemic continues to put a focus on the environment, we find:

• Plastic waste is the second biggest environmental concern in the world.
• Eco-Actives, the group we identify as consistently working to reduce their plastic waste, has grown in number from 16% to 20% of global shoppers since 2019.
• One in five shoppers say that since the pandemic began, they have acquired more environmentally friendly habits, and 16% are focusing on more environmental initiatives.

Our data continues to suggest that innovation to reduce plastic remains an opportunity. We’ve observed that shoppers are highly conscious of the packaging they buy weekly, and it is top of mind when they consider how they can personally reduce their environmental impact. While shoppers have been checking fewer aspects of food during the COVID-19 pandemic, “ recycled pack” (+4% points) and “quality assurance” (+3% points) labels are being checked more than before, demonstrating the demand for a green alternative to waste plastic.

Environmental concern is personal

The survey of 80,000 consumers across 19 countries finds nearly half (46%) feel personally affected by environmental problems, however, it is other people rather than brand or media influencers encouraging them to be greener. 38% feel that those whose opinions are important to them are driving them to change, with children the most likely (50%) to impact behaviour towards the environment followed by friends (43%) and partners (41%).

Gaps still remain between caring and doing when it comes to supporting green initiatives; 87.5% say buying products with reduced packaging is important to them, but just 20% are segmented as Eco-Actives, taking regular day-to-day actions to reduce their packaging waste.

In the most recent four weeks year-on-year sales growth decelerated to 8.0%, the slowest rate since April 2020. Fraser McKevitt, head of retail and consumer insight at Kantar, comments: “Grocery growth tailed off in August as the Government’s Eat Out to Help Out scheme got underway and people were encouraged to return to offices and resume normal routines. Diners’ confidence built throughout the month and footfall increased* during each week of the scheme, culminating in the final bank holiday Monday when dining out accounted for two and a half times greater share of consumer spend than the pre-Covid average.

"Fewer meals eaten at home meant consumers spent £155 million less in the supermarkets in the four weeks to 6 September compared with July. Alcohol sales dipped month on month, with wine down 5% and beer down 10%, as the scheme encouraged people to swap Zoom catch ups for their favourite bars and restaurants. The chance to see colleagues, friends and family in person again seems to have reignited personal grooming routines – sales of hair styling products were 17% higher in August than July, hair removal treatments were up by 11% and deodorants by 3%.”

Online grocery sales rose by 77% year on year in the past four weeks, bringing the cumulative increase in orders to £3.2 billion since lockdown began. Fraser McKevitt comments: “While online grocery growth is still impressive, it has slowed for the second month in a row and dropped back to 12.5% of total sales this month from a peak of 13.5%. This is not just about people going out to eat in restaurants, August also brought shielding to an end for many vulnerable and at-risk people.”

Ocado, which launched its partnership with Marks & Spencer’s to shoppers on 1 September, was the fastest growing retailer over the past 12 weeks, with sales up by 41.2% year on year. Its former partner, Waitrose, increased overall sales by 7.3% compared with last year, and Waitrose.com experienced the fastest year-on-year online growth of any retailer.

Amid a challenging economic climate, retailers across the board are finding new ways to deliver value for customers. Fraser McKevitt comments: “As we move out of summer and closer to the end of the Government’s furlough scheme, retailers are thinking about how they can help households manage their bills. Promotional activity is now back to the highest level since February 2020 and is focused mainly on straightforward price cuts, with shoppers spending £247 million more on these deals compared with a year ago. Meanwhile, multibuy deals are down £116 million over the same period.

“We expect loyalty schemes to become increasingly important in the months ahead. 26 million British shoppers hold at least one supermarket loyalty card, with the average person carrying three in their wallet. Lidl launched its ‘Lidl Plus’ loyalty app in the UK last month and Tesco, which runs the single biggest scheme with ‘Clubcard’, continues to launch new discounts through the programme.” Lidl increased its sales by 11.4% and Tesco by 10.5% over the 12 weeks and both retailers held market share year on year.

Iceland continues to benefit from the performance of frozen food this year and grew sales by 20.8% during the 12 weeks, achieving a 2.4% market share, up from 2.2% last year. Aldi increased sales by 10.0%, with its market share slightly down on last year to 8.0%. Aldi will be hoping its upcoming sponsorship of ‘The Great British Bake Off’ will help it build on the 8.7 million shoppers who already buy sweet or savoury home cooking items in its stores.

Sales at Co-op rose by 13.4%, but increased by more than double this rate in the North of England, where local lockdowns mean consumers are continuing to shop closer to home. Meanwhile, symbols and independent retailers saw sales rise by 31%. While shopper numbers are down by 2.3 million from the May-lockdown peak, those customers still visiting spent £131 on average over the 12 weeks, £24 more than the same time last year.

Morrisons sales rose by 12.9%, with market share up by 0.2 percentage points to 10.1%. Sainsbury’s and Asda’s sales increased by 8.0% and 6.3% respectively.

Following up on our 2019 Who Cares, Who Does? report, our global study on attitudes and actions towards living sustainably and reducing environmental waste, this year’s publication provides updated and new insights in this area. The 2020 report is based on the results of a survey covering more than 80,000 respondents from 19 countries across Europe, Latam, US and Asia, and explores how manufacturers and retailers look to meet their environmental commitments and bring more consumers with them.

Join us for a webinar on 16 September when our expert Natalie Babbage, Global LinkQ Director, will share the main findings of the study, to help you understand what consumers expect from your brand around sustainability.

Sign up for the webinar:

Wednesday, 16 September 10:00 BST

Wednesday, 16 September 16:00 BST

It’s widely accepted that brands must still invest in advertising in times of disruption. Maintaining share of voice, positively influencing consumer decision-making and finding new shoppers are constants – recession or not. However, what is the broader risk of cutting back and if you do, where should you focus your investment for maximum impact? Managing costs will still be a priority, so understanding how to optimise spend has never been more important.

CPG companies took a range of approaches during the first few months of the pandemic. Coca-Cola – which cut its advertising spend completely – is now back with its multi-channel Open Like Never Before campaign. Diageo reduced its rate of investment in advertising and promotion (its spend as share of sales) by 4% between April and June. Unilever took a different tack, keeping its budget between 23 March and June relatively stable at £27.4m, a slight year-on-year increase of £765,000. Procter & Gamble increased its ad spend by 8.5% in the year from June 2019 to June 2020.

The impact these decisions will have on their brands’ bottom line – and their long-term market and brand growth – remains to be seen. What we do know from conducting media effectiveness studies all around the world, however, is that choosing to stop or significantly reduce advertising could have impacts that take years to recover from.

Lost sales and reduced penetration

The average short term effect from advertising is an incremental 4.5% sales increase, recorded in the month after a typical eight-week campaign.

The rise in sales is higher for a brand that operates in the Health/Beauty and Homecare categories, and lower for a Food and/or Beverage manufacturer.

This is what you need to defend just to stand still, and what you stand to lose if you choose not to advertise. Multiply this by the usual level of activity over the course of a full year and you start to get a sense of the longer-term impact. Taking the example of a brand that generates $10m worth of sales in a six-month period, if the brand would ordinarily run two ad campaigns during that time, but decides to postpone or cancel, it stands to lose an average $900k in revenue.

It’s also imperative to consider the impact of an advertising hiatus on the penetration of a brand. Almost nine in 10 (86%) of the brands that grew globally in 2019 did so by increasing their penetration. Worldpanel studies show that a brand must replace 50% of its buyers each year just to defend its current position. Recruiting shoppers is a continuous cycle, and it’s crucial to keep gaining new shoppers in order to secure the long-term health of the brand and build its potential for growth.

Typically, in the short term, growth driven by penetration gains accounts for two thirds of the post campaign sales uplift – so any marketing lever that can be pulled to help maintain and grow penetration should not be compromised. If you won’t collect those gains from advertising, other levers must work harder. Advertising also reminds and retains existing shoppers, and it can take many years to recover from the loss of heavy buyers – particularly for bigger brands who have a slightly heavier reliance on them for their sales.

Defending brand value – keeping the love

The grocery industry does have an advantage over other sectors. Firstly, it is largely recession-proof. Everyone still has to eat, after all, and consumers are much more likely to cut back on bigger ticket items in times of financial hardship. Secondly, in-home treating tends to do well as consumers divert spend from eating out. Having said that, CPG brands can be impacted by external factors that are out of their control, such as competitor activity – only serving to reinforce the vital role advertising plays in a crisis.

The fact is, recessions disrupt loyalty: financial concerns and consumer confidence affect our choices, making where we buy and what we buy more important. Decisions are made at the shelf every day and consumers need a good reason not to default to the cheapest option available. Also, can we really be confident that retailers will resist embarking on price wars? This carries considerable risk, particularly as CPG brands are already defending significant price differentials between their products and the private label equivalent (or those of a local country brand).

The table below illustrates an example from the UK, summarising at a sector level the typical price difference between a manufacturer brand and the private label equivalent, and the percentage of sales attributed on the basis of ‘brand’.

In this environment, advertising plays a crucial role in a brand’s ability to reinforce its value, and successfully maintain the messages of quality, trust and differentiation that earn it the right to charge a higher price. Without creative and effective brand advertising, the shopper choice risks becoming a simple one based on price alone. In addition to exposing a brand to immediate losses, this will make it harder to launch premium variations in future, and drive retailers to push the brand even harder on price as we enter the recession.

 We would go further. Reducing advertising activity is not an option because share changes have lasting impact. Once lost, chances of recovery are not good. However, the opportunity is clear with longer term gains there for the taking.

There are hopes that the world will be back to something like normal in the final quarter of this year, and if not, then the start of 2021. However, the current reality is that the pandemic is far from over, with some countries still coping with the first wave and the threat of a significant second wave getting more likely by the day. Also, while initial trials look promising, we still don’t have a vaccine. There is still a way to go before the crisis is fully behind us, and for large segments of the population the virus remains a significant threat. Governments find themselves between a rock and a hard place, under pressure to get the economy moving while the virus is far from being eradicated.

The overall result of these tailwinds will be a slower recovery than any one of us would like. We’re likely to see a significant rise in unemployment, and an increase in fears about the future. It’s likely that, for quite some time, it won’t feel anything like a recovery at all.

The news media will continue to cover the news, and our pre-programmed negativity bias will lead us to believe that the bad news will apply to every sector of industry. The reality is it won’t – there are always winners and losers. And if there’s one sector that is likely to prosper during the recession, as it has during the pandemic, it will be the food and grocery industry – also known as the consumer packaged goods (CPG) sector.

The resilience of CPG value

Economic statistics like GDP actually have little bearing on how much we spend on food and grocery every week. We’ve looked at the last 11 years of data, across 12 countries, and found only a weak correlation between GDP and CPG growth levels. Even when we used different time lagging scenarios to look for a relationship we found none. So, we should be wary about assuming that poor GDP figures will translate into similarly low CPG figures sometime in the future.

The next statistic to, frankly, ignore would be measures of overall consumer confidence. These measures are highly likely to hit ‘rock bottom’ later in the year. Our work looking at this metric over time, however, shows that it too is uncorrelated with CPG growth, and has not in the past been able to predict changes in CPG value growth with any accuracy.

Why are they such poor predictors? The (rather obvious) answer is that we can’t simply stop eating, drinking, washing and cleaning. When it comes to saving money, we think more easily about what we can stop completely – for example, holidays, car purchases, home appliances, gym memberships and eating out. In the 2007-8 recession, we asked main shoppers in a household “what are you likely to reduce or cut out to manage your income?” It was these big-ticket expenditure items that topped the list in every country, with food and grocery everywhere always much lower.

That isn’t to say we won’t also manage our food and grocery bills; we all do to various degrees and for various reasons. However, in Western Europe, for example, very few of us buy exclusively Private Label products or shop only in discounters. We tend to adopt various budget coping strategies that don’t involve maximising the potential savings we could make with a more disciplined – well managed and totally consistent – approach to where we shop and what we buy.

When we investigated 12 countries over 11 years to understand what measures correlate with CPG expenditure growth, it was volume (the amount of goods bought) that came out top and downtrading (buying cheaper goods) bottom. This suggests that if we reduce our CPG spend in the recession it will be primarily by cutting items out, rather than shopping in cheaper stores and buying cheaper items and categories – for instance moving from fresh to frozen food. As we’ve already said, we struggle to do this every day and week, and the evidence confirms that our preferred way of budgeting is to ‘stop buying’ rather than to adapt and carefully manage our shopping behaviour.

The scale of the decline

To understand the scale of the potential decline in CPG, we need to look at those households who are already working to a strict budget, and those whose income will reduce due to unemployment.

When we investigated the latter in Spain, in households where at least one person had lost their job, we found a 2% reduction in overall CPG spend in the year after being made unemployed. This shows, especially in recent times when a change of any measure under 10% is seen as low, the underlying resilience of the CPG sector in general. Consequently, even if levels of unemployment reach double digits then CPG growth overall will still be closer to flat if the 90% or so of people still in employment spend at the same levels as before.

Shoppers are likely to try to save money, and be more cautious – but as we said before, they will review large item expenditure first. 

We must also take into consideration the benefit for food and grocery that could easily come from the most consequential and long-lasting effect of the pandemic: people working from home. We know that growth of around 20% occurs when everyone is at home and out of home purchasing is very restricted. So, if many of us remain homeworkers during the coming months of recession, which is the most likely scenario, we would expect – even with high unemployment – CPG spend to remain at higher levels than before the pandemic.

If more of us spend more time living and working at home important secondary effects will come into play. For example, it will have serious consequences for our transport services, city spaces and hospitality services that rely on people going to their workplace. Food and grocery manufacturers that rely more on out of home purchasing will therefore find it harder to grow – as they have done during the pandemic – if these conditions persist. 

Price is a potential battleground

There is one reason to be cautious about CPG value staying in growth through the recession: the high potential for a retailer price war. Pure ecommerce and discounter retailers look to be in prime position to win share during a hard hitting recessionary period, hence the need for the mainstream retailers to compete more directly on price.

We believe they’ll take a multi-faceted approach, creating a positioning that nullifies the current price advantages of the discounters and pure play ecommerce retailers. The main areas they’re likely to target, based on what we’ve seen in the past, are: 

1. Price matching on the basics – making significant reductions to match the discounter prices on essential non-branded goods, fresh food and targeted packaged goods categories. 
2. Promoting the fact that they have more famous and trusted brands available by making them cheaper than ever before. We expect this will take many forms, including permanent price reductions, increasing the number of price promotions, pushing big size value packs and delisting many non-essential expensive formats.
3. Reducing premium choice across many categories to reduce till shock. This will ensure total basket prices are minimised.
4. Rewarding shoppers, to foster more loyalty and less switching. Retailers will offer more incentives to loyalty card users, such as free delivery, cheaper petrol, and ‘best ever’ total basket and category deals based on past behaviour.

In conclusion, the recovery period isn’t going to feel like one for any of us. However, brands, manufacturers and retailers in the food and grocery sector should remember the following points: 

• Don’t assume that a decline in GDP or consumer confidence means CPG growth will follow – the opposite could easily be the case. 
• It’s the big-ticket activities that will go first when we need to save money. Food and grocery could be the one way we treat ourselves.  
• We struggle with extreme grocery budgeting strategies, which means we can be potentially swayed on every occasion.  
• Recessions don’t affect everyone. It will be the majority that remain relatively financially stable who will ultimately decide the overall growth of food and grocery. 
• If working from home becomes a permanent model, then food and grocery overall will continue to benefit.
• Retailers are setting up for a price war. In pursuit of market share they’ll make life considerably harder for their suppliers. They will need to be constantly shown how and why people choose to shop where they do, to ensure that price is not the only factor that comes into play as a strategy to win new shoppers and retain existing ones.

On one hand, people have been at home watching and streaming more TV than ever. On the other, there is a high degree of financial concern as a result of the pandemic, which might impact purchase behaviour. Kantar data reveals that this differs significantly by country.

While a quarter of people in Italy and Spain feel very concerned about their financial security (25% and 24% respective), this drops to 13% in France and 12% in Germany while only 10% of British consumers feel this way.

In the last two years, consumers have expected more and more from their TVs. As their expectations have increased, so has their willingness to spend more to get those needs met. TV manufacturers have seized on this opportunity to sell more premium & super premium TVs, with this combined spend tier showing growth of 13%. This compares to the mid-tier which grew at 4%, the high tier at 1%,  while the low tier remained flat. The gap in quality between premium TVs and mid-range TVs has widened as people favour new technologies such as QLED (quantum dot), OLED (organic light-emitting diodes) or 8K screens. Brands such as Sony have focused on the super-premium end of the market in a bid to increase profitability. Generally, these are the higher income/older customer where 59% of Sony’s installed base is 45+ compared to 55% for the market average. 

A key concern now for the super-premium sector is that sales have increasingly shifted to online due to the pandemic. Pre-pandemic, on average 62% of TVs were bought in store, but this figure is higher for premium brands such as Sony (69%) and LG (64%). Where people are spending higher amounts of money, the focus has previously been on viewing and trying out the product before making their decision and Sony’s purchase journey has been heavily reliant on store visits. 56% of Sony purchasers (12 months to Q1’20) visited a retail store in their purchase journey (9% above average) with 27% (4% above average) relying on sales-person advice. The brands focused on the premium sector need to find some creative solutions in place of a store visit to offer the experience and quality assurances their buyers need.  

With such a reliance on the in-store experience Sony risks sales conversions dropping lower, and we know that price/value are more important via an online purchase as the sale is more commoditised and less based on the visually impressive in-store experience. Sony is notably weaker in sales through Amazon, with only 10% of sales, which is 5% below the market average. Having a strong online presence and strategy is now vital to the future growth of brands.

With the cost of a premium TV in the thousands compared to lower-end ones in the hundreds, the question is whether the premium end is going to be impacted more as a result of economic hardship. Sony, which has focused on the super-premium end of the market, might particularly struggle with this shift in the environment. It is is perceived as a quality brand, with 19% of owners citing this as an influence in their purchase decision, which is considerably higher than the other brands. However, only 13% consider the brand to be good value. The issue for Sony is that 26% of its current owners are nearing the end of their TV lifecycle. In the current financial context, there is a definite danger that, as they have lower loyalty than other brands (46%, compared to Samsung 65% and LG 51%), some people might switch out of the brand to one of its competitors.

The pandemic is a double-edged sword for the super-premium TV sector. On the one hand the role of the TV as a means of entertainment has become more important due to increased time at home. However, the stress on people’s finances and change of shopping channels will have an impact on the demand for new appliances. These are all issues that brands can meet through the ranges that they offer, payment terms and their communications around product benefits. As with so many things about the new normal, only time will tell how things will change, but being aware and prepared for the issues facing customers is vital for the brands that are to remain successful.

The number of households with children under six grew by 3% in 2019. This is an attractive segment to target as they spent 8.6% more on babycare products and 9.7% more on all other FMCG segments. While the pandemic has made many reprioritise their spend, babycare and family health is a strong focus for moms.

It is important to understand the needs and motivations of these mothers, three quarters of which are either millennials or centennials. The report identifies five rules to engage with this unique group. It considers the key things that are important to them, such as natural ingredients, the different stages that new mothers go through as their children grow and the places that they shop.

A very important feature of this group is that they are highly connected. Almost a quarter of new mothers access social media every day. It provides a way to communicate and unite with others who have children at the same stage of development. This has never been more important than now as new mothers can feel relatively isolated in a time when it is less easy to meet with others socially. Online word of mouth is something that brands need to be aware of and tap into for their growth.

The pandemic has created new behaviours and preferences, which are evolving as the level of the crisis changes. Listening to the needs of mothers has never been more important than it is now and the opportunities for growth are there for the brands that do this well.

Emer Healy, retail analyst at Kantar, comments: “With restrictions on movement and eating out lifting, grocery spend is climbing down from the record-breaking heights we saw in previous months.  A year-on-year comparison shows that shoppers still visited stores four fewer times over the 12 weeks, but trends are less stark than they were at the peak of lockdown.

“The relaxing of rules across much of Ireland means shoppers are less inclined to favour large, infrequent shops.  People spent approximately €5 less per trip over the past four weeks compared with April, picking up fewer items in store as they start to return to pre-Covid-19 habits.”

However, online sales continued to accelerate.  A staggering growth rate of over 125% drove the channel to a record market share of 4.6% of total sales this period, contributing an additional €75.1 million to the market.

Online isn’t the only stand-out performer.  Emer Healy continues: “Economic uncertainty and predictions of recession have failed to dampen consumer appetite for branded groceries.  Brands have managed to capture an impressive proportion of consumer spend over the latest period, amounting to an additional €245 million and outpacing private label to grow by 23.4%.  It suggests that people are choosing to treat themselves in store with little luxuries while we’re all spending more time at home.”

Aldi and Lidl have both seen branded sales soar, but the retailers’ reputation for value means they also stand to benefit should shoppers look to tighten their belts.  Aldi recorded strong growth of 18.4% this month.  Meanwhile it has been a busy few weeks for Lidl, which launched its rewards scheme Lidl Plus and achieved the strongest growth rate of all the major retailers this period, helping it to its highest ever market share of 12.8%. 

Despite a wet and rainy summer, the Irish government made a strong case for holidaying within Ireland’s borders when it introduced its Stay and Spend tax incentive in July.  Emer Healy says: “The bad weather didn’t dampen spirits and sales of firelighters and logs were boosted by people’s new summer plans, growing by 77% over the latest four weeks as we enjoyed barbecues and camp fires.  Hotel breakfasts were swapped for homemade alternatives and eggs, bacon and sausages all grew ahead of the market in the same period.”

After months of exceptionally strong growth, take-home alcohol sales have begun to taper.  Emer Healy continues: “Alcohol sales are up by 56% over the past 12 weeks, but this represents a significant slowdown from the 76% growth rate we saw last month, as people get used to new rules and are more inclined to socialise out of home.”

All of Ireland’s traditional retailers registered growth over the latest 12 weeks.  Buoyed by their online offers, SuperValu continues to hold the highest market share at 22.3% and Tesco took second place at 21.1%.  SuperValu remains the only retailer to attract new shoppers this period, contributing an additional €624,000 to its growth.  Bigger baskets, with volumes up 25%, and higher average prices drove growth for Tesco this month. 

It was a similar story for Dunnes – the retailer again recorded the highest average spend per trip while also experiencing an increase in volumes and higher average prices to hold a 20.5% market share. 

The effects of COVID-19 are raising concerns about household income and job security, combined with worries of increasing costs among Vietnamese consumers, according to a Kantar Worldpanel survey. Could this lead to consumers controlling their spending more in the longer term? Do value-for-money retail formats like discounters have the potential to emerge across Asia, post pandemic? In this article we analyse the value-for-money retail models we believe we’ll be seeing in the near future.

What drives growth for discounters, globally?

Globally, discounters have been able to grow sales by +6%, versus only +2% for total channels, and they now account for 11% of dollars spent on fast-moving consumer goods (FMCG), which is a big increase in share in a short space of time. In fact, growth is coming from everywhere except Asia.

There are two angles to this growth:

The first is the number of physical store openings across the world, which has been quite a big driver of their share gain. In the US market, Aldi has added 7% more stores to its estate, while in the UK they opened 70 new stores in 2018 alone. Finding the land for new stores can be challenging. However, with an average store size of 500-1000 square meters, which is still smaller than the average hypermarket and supermarket store, owners of discounters are not struggling.

The second key driver of their growth is more shopper driven – globally, shoppers want to have good quality at a good price and this value-for-money standing is exactly the positioning that discounters have been able to carve out.

In Europe, the positioning has developed significantly over the last few years and is not only about price. The atmosphere is very different if you visit an Aldi or Lidl. Many stores have been refreshed and enlarged to make for a very pleasant shopping experience, with a strong focus on fresh foods, bakery and frozen areas... completely different from 10 or 15 years ago.

In France, Lidl has been on a journey from a hard discounter to a top retailer. Around 2015, they changed their communication style to shoppers. They began to communicate more heavily, increasing media spend with a clear message about “the real price of good things”, which really resonated with French people.

The evolution of discounters' product assortment

There has been a movement here. At the beginning, it was very much about grocery and household products, but now discounters have expanded into all sectors such as fresh foods (fruit and vegetables), meat and bakery, and they also provide textiles and other non-food items.

However, there are two key differences between discounters and hypermarkets and supermarkets. One is that the assortment is still very different in terms of the number of SKUs and the presence of brands. Depending on location, discounters usually have 1000-1500 SKUs, while a supermarket will have 3000-4000. Private label will account for 70% of discounter products, while in supermarkets it would be the opposite: more than 70% of items are branded products. 

In Columbia for example, we saw the average discounter carrying just 500 to 600 SKUs, with only one key brand for each of the high value categories. This helped them breed some familiarity to shoppers when they came into the store; however, once sales of private label SKUs started to outstrip the sales of the own-brand offer, they were quick to remove them. 

The second difference is in logistics. Discounters focus on cost savings via low buying costs, and the way they put products on the shelf is different. With high stock rotation, products are often shelved in-box or even still in the pallet. Some manufacturers have started to package their products differently for discounters, on this basis. 

Usually, you will have a different assortment versus other stores: even where brands are listed, they will be in different pack sizes, perhaps shorter shelf life, or simply short-term listings. 

Do discounter retail models only attract low income shoppers?

Generally, when we talk about discounters in France or the UK, penetration rate is already high, so they are quite mainstream.

That said, overall their profile is lower among high-income shoppers than average, skewing to low and medium-low-income families.

In the past, discounters would be popular for specific events like Christmas or for top-up shopping between big trips to hypermarkets and supermarkets. However, they feature much more in routine shopping missions now. The frequency of shopping is still much lower than hypermarkets and supermarkets, which means there is room for improvement.

Discounters are now attracting shoppers of all income groups, but what they need to do is to focus on building loyalty. For example, they don’t offer any strong loyalty card programmes, which would help drive more frequent trips, as well as more data for the retailer to use.

Challenges and opportunities for value-for-money retail models to succeed in Asia

In a lot of Asian markets, modern trade is still developing. In Vietnam, it accounts for just 20% of the market, with such a strong traditional trade. However, as we saw in Latam, particularly Colombia, it is still possible to succeed.

Are shoppers ready to go for an 80% private-label assortment when they are so used to buying brands? That will be a big challenge for discounters entering the Asia market. Maybe brands would need to have a bigger focus, at least at the beginning. Brands are a good way to attract shoppers, and give them some familiarity in an otherwise unfamiliar store setting.

From a logistics side, discounters will want to work with small manufactures who can commit to providing exclusively for their store, so they will need to do their homework to find them and that takes time. Some manufacturers won’t want to shift focus from being a brand owner to producing for a retailer.

Aldi launching in Shanghai will certainly be an interesting development to monitor. They’ve shown they can adapt themselves to a local context and excite shoppers with imported products. If this first step is successful, it’s highly likely they will be exploring other markets to enter and emulate.

The potential of Private Label

In Asia, private label is still a relatively small proposition, due in part to lower modern trade development. That is slowly changing, and we are seeing more and more private label offers in store. We can learn from European markets about the driving factors behind the success of private label products.

Private labels were first launched in the 60s and 70s, but they tended to be poor products and had really bad quality packaging.

It also started in homecare markets (what we now call low involvement categories) such as paper products and cleaning products, where people care less about the product they use. However, today, we see private label on offer in nearly all markets, and that’s because private labels offer shoppers both a good price but also good quality.

In Europe they account for around 35% of value share, over half in countries like the UK, and that’s not just one line of private label. Today you have different tiers of private label from value, to mainstream, to premium, to super premium, organic etc…and they operate like brands.

Of course, value came first, but from the late 90s and into the 2000s we started to see all the range splits, and a proper focus on quality through working with better processes to produce goods. In many cases, the branded manufacturers also work with retailers to produce their private label offer. Interestingly, research from Europanel shows that private label introductions are more likely to cannibalise other private label products, rather than branded products. Choice mechanisms can help explain why: 'Similarity' - the private label often has the same store name; and 'Compromise' - introductions at the bottom and top of the price hierarchy mean that products in the middle (brands) become more attractive compromise choices.

Today, the growth of private label is mainly thanks to discounters. In the long term, private label growth tends to impact the middle ground. Hence, the more private label develops, the more the manufacturers of such brands need to build unique characteristics or specific use benefits.

If we look at Vietnam, private label is still small, earning about 1% market share within FMCG in the four key cities (Ho Chi Minh city, Ha Noi, Da Nang, Can Tho). However, it’s on an upward trajectory, with key modern trade retailers increasingly exploring this profitable strategy.

As of now, 90% of private label spend is coming from homecare products and packaged foods – paper products, cleaning products, cooking oil and sauces, to name a few. Retailers are playing with lower price points and bigger pack sizes, but product quality can compete with that of branded offers.

Given the low awareness of private label products among Vietnamese consumers, we are seeing a stronger push for private label from key retailers, especially foreign retailers: not only in hypermarkets and supermarkets format like Emart, Aeon but also in convenience formats like FamilyMart. They offer a wider range of choices and segments, invest in branding through packaging, and focus on product display in key areas to attract consumers.

It’s not clear at the moment whether their efforts will truly help private label products to grow in popularity, but there is huge potential for success in the next few years. With the rise of convenience stores, the revitalisation of big retail formats toward “retailtainment” and the potential emergence of new retail (like discounters), it wouldn’t be a surprise to see private label products growing.

There are a few things that retailers may consider to develop private label or run discount stores in Vietnam:

We have changed the way we shop during isolation, starting from the assortment to have the essentials to stay home, to our eating, working and socialising habits. The changes people have made, in order to take care of their health, have been disruptive for both mass consumption products and the marketing channels and retailers.

In this Winning Omnichannel Latam report, we want to share with you the global impacts the pandemic has had, and dive into how it is affecting retail and consumer commerce in Latin America, helping you understand how to navigate this complex and changing world.

Charlotte Scott, consumer insight director at Kantar, said: “While things are far from normal, the data shows a gradual softening of the more extreme lockdown trends in the grocery market.  The relaxing of rules across much of the country means shoppers are less inclined to stock up their cupboards with regular large trips.  That has seen average spend drop below £25 for the first time since March.  However, at £24, it is still a world away from the pre-Covid average of £19 per trip.  

“Although the current average of 14 shopping trips per month per household is lower than it was last month, it is higher than in April and May, when lockdown rules were much tighter.  So, while some consumers have shopped more often in the past month, the story varies in different parts of the country, with localised lockdowns and slower openings resulting in people making fewer trips in the North, the Midlands and Wales.” 

This period saw the introduction of mandatory face coverings for visiting shops in England.  The number of supermarket trips was two million lower than would have usually been expected in the week after the rule was adopted, and currently just over half of shoppers say they feel safe in stores.  That suggests the public may need time to adjust to the new regulations, and they now have to plan ahead for every shopping trip.  

One of the most significant lockdown trends, online shopping, reached another new record market share in the latest four weeks – with 13.5% of all sales now ordered through the internet.  Ocado has been a major beneficiary of this, and it also hit a new record this month, registering a market share of 1.8% over the past 12 weeks and growth of 45.5%.

Elsewhere, wider economic issues will continue to dictate how the market performs, as Charlotte Scott explains: “With the country officially entering recession last week, atypical behaviours are likely to continue.  During a recession we would generally expect shoppers to manage their spend more carefully.  Early evidence suggests that most are not yet choosing to trade down, with brands and premium own label lines currently performing well, however price cuts have increased compared with July as some people look for opportunities to save.”

August also marked the introduction of the Government’s Eat Out to Help Out scheme, designed to give a shot in the arm to the hospitality industry.  Early indications suggest that the initiative has been successful, with a significant uplift in footfall at restaurants, cafes and bars between Monday and Wednesday over the past fortnight.  The exclusion of alcohol from the scheme may make that a resilient category for the grocers.  Take-home alcohol sales over the past four weeks were up 28.3%.  

The past month has seen a renewed focus on health, with wellbeing high on shoppers’ agendas.  Charlotte Scott says: “People want to get back to their best after the long lockdown, and clean living is a priority again.  Over the past month, we saw sales of vitamins and minerals grow at 34%, while herbal teas were up by 19% and nuts by 21%.”  

In the latest 12 weeks all of the major retailers registered overall take-home sales growth.  However, all bar Ocado saw that growth slow compared with July.  

Morrisons was the fastest growing big four retailer, with sales up 16.0% driven by a particularly strong performance from its supermarket stores – it now accounts for 10.2% of the market.  Despite Tesco being close behind in terms of growth, it lost market share of 0.4 percentage points bringing it to 26.6%.  Sainsbury’s share now stands at 14.9%, losing 0.5 percentage points this month, while Asda lost 0.6 percentage points taking it to 14.3%.

Iceland was the second fastest growing retailer at 29.2%, its share increasing to 2.4%.  Meanwhile, Co-op increased its share to 7.1%, with growth of 22.4%.  Lidl successfully managed to hold its share steady at 5.9%, while Aldi and Waitrose both lost 0.2 percentage points taking them to 7.9% and 4.7% respectively.

From the increase in at-home consumption to a shift in shopping patterns in favour of online and proximity channels, it’s clear that new needs and behaviours have emerged.

Looking ahead, the economic impact of COVID-19 makes recession seem a certainty, leading to fears over jobs and income. Consumers will need to make some new choices about how they spend their money, where they spend their money and what they spend it on.

But if we take the learnings from previous recessions, we can see that FMCG brands are likely to be better placed than others to withstand the pressure and disruption of a global crisis. For some, it will be about rebuilding their business; for others, it will be about staying ahead. For many, it will be about reinventing themselves for the ‘new normal’.

In our new ‘What Now? What Next?’ paper, we help you navigate through challenging times by examining some of the commonly asked questions across the Asia Pacific region, including:

• Global vs local brands – who is winning and how?
• Changes in consumer/shopper behaviour – how and why are they shifting their spend?
• Ecommerce in FMCG – how incremental is the channel?
• What is the role of proximity stores – now and in the future?
• How are the ‘displaced’ (lower income households) behaving?
• What role will pack, price and promotion need to play in winning back shoppers?

In addressing these questions, the report showcases some market examples to provide practical actions on what to consider as brands move into a post-COVID-19 world.

Download the paper to find out more, and get in touch with your queries.

Although gradually emerging from constraints, shoppers across India are still living their lives under restrictions, which continues to impact their FMCG purchase behaviour. Lockdown rules currently vary from one part of the country to another, so the picture is not a consistent one; however, there’s plenty we can learn from the data.

We’ve combined some key insights into our new report, featuring ten slides about the impact of COVID-19 in India, which is now available to download. We look at:

• The shift in cases from urban to rural areas
• India’s healthy 7% growth in FMCG volumes – in all categories bar Beverages
• The rise in consumption occasions as lockdown lifts
• How frequency is changing – with high-frequency households shopping less
• Why 43% of brands are losing volume
• The huge growth of ecommerce: half of all households now buy online

These are the trends that will shape FMCG strategies in India in the coming months. By understanding the new buyer segments emerging, and how purchase behaviour is evolving, brands can prepare themselves for the intensely competitive period that undoubtedly lies ahead.

Download the ten slides through the botton on the right, and get in touch with your queries.

• SVoD sign-ups during the three months to June remained fairly flat quarter-over-quarter, with 9.1% of US households taking a new subscription during the second quarter of 2020.
• 44% of new subscriptions were stacked, meaning they were taken by households who already had existing SVoD subscriptions. 
• Amazon Prime Video took top spot among new SVoD subscriptions, with 23% share in the quarter, up from 14% in the first quarter, as Disney+ share fell back sharply after a period of rapid expansion.  
• HBO Max saw a promising start, grabbing one-in-ten of new SVoD subscriptions taken out over the quarter.  
• 39% of HBO Max sign-ups cited specific content as their key motivator to join, with Game of Thrones, Sopranos and Westworld the top three individual titles driving customer acquisition. 
• Overall, SVoD subscription stacking edges down to an average of 3 per household, despite in-quarter launches from HBO Max, Quibi and Peacock for Xfinity customers. 
• As Quibi struggled with stay at home orders challenging its mobile first business model, already 33% of subscribers plan to cancel in the next three months. 
• In a sign of the wider impact on the entertainment industry of Covid-19, the proportion of US households which went to the movie theater dropped from 43% in the first quarter to just 5% in the second quarter. 

The second quarter of 2020 has been busy, seeing the launch of HBO Max, Quibi and a more limited Peacock launch. HBO can be pleased with progress to date in terms of new subscriber numbers, and importantly at the end of the quarter, just 18% were on free trials. The key challenge for HBO Max will be enduring longevity of subscribers – there are already some signs that attitudinally, HBO Max subscribers do not view it as a long-term commitment, in the same way they do Netflix. Driving engagement with newer HBO content, alongside headliners like Sopranos and Game of Thrones will be important. 

Quibi has been hit hard by stay-at-home orders, greatly reducing the unique selling point of its short time frame, mobile-first approach. Quibi achieved 3% of new subscriptions in the second quarter, but planned cancellation rate is high at 33%. The average Quibi subscriber holds 5.1 SVoD subscriptions, which is unlikely to be sustainable given its large gap from the market at 3. Quibi subscribers’ biggest gripes are around quality of the shows, ease of use and buffering/speed issues. 

Based on a longitudinal panel of 20,000 consumers and boosted by 2,500 new subscriber interviews each quarter, Kantar’s Entertainment On-Demand service is designed to help the broadcast industry and investors understand the full consumer journey for digital video subscription services. 

Kantar Entertainment On-Demand is delivered by the same team that provides the world’s leading mobile phone manufacturers with global mobile phone purchasing and usage trends. Kantar is the industry standard for TV viewing habits in more than 60 countries around the world, as well as being the leading global source of ad spend. Entertainment On-Demand is the only subscription service providing both quarterly installed base and new subscription market share alongside deep analysis on purchase motivations, including named content, customer experience, and diagnostics on ‘at-risk subscribers’ as well as guidance on acquisition and retention strategies. 

We know how important ecommerce is for FMCG retailers and brands. One of the fastest-growing channels, it has accelerated even faster during the pandemic as people shift from in-store to online.

While online has seen a huge uptick, the out-of-home (OOH) sector has suffered. Prior to lockdown it accounted for over 40% of snacking and beverage spend, but a collapse in OOH has resulted in spend in these categories falling by between 10% and 30% in major markets.

But how does a brand know if it’s currently winning online or suffering from reduced OOH consumption? Following the launch of Kantar’s global Brand Footprint report in May, we have launched two new rankings on our Marketplace platform looking at the top online and OOH brands to help companies understand how important these channels are to a brand’s true performance.

Heinz tops Online brand ranking

According to our online ranking, Heinz is the most chosen FMCG brand online, based on analysis across six key ecommerce markets: Chinese Mainland, South Korea, Taiwan, France, Spain and the UK.

It’s no surprise that Heinz takes the top spot, given the nature of its products; heavy and with a long shelf life, it’s the ideal choice for those shopping online. The brand, however, saw a slight fall in its online Consumer Reach Points (CRPs) , whilst most other brands grew with many seeing growth of +20%.

The standout brand is L’Oréal Paris with 25% growth and with the joint-highest proportion of its CRPs from the online channel (14%, the same as Kleenex).

Five of the top 10 in the online ranking – Coca-Cola, Nescafé, Colgate, Pepsi and Lay’s – are the same brands we see in our main Brand Footprint report (which combines both online and offline purchasing).

The average proportion of CRPs coming from online is 8%, with a high of 14% and a low of 4% (Coca-Cola, Lay’s, Oreo and Activia). But as online grocery shopping continues to grow during the pandemic, especially among older shoppers, it will be interesting to see how much this changes next year.

Source: Kantar, Worldpanel FMCG take-home purchase panels
Countries: Chinese Mainland, South Korea, Taiwan, France, Spain, UK
Time period: 12 months ending October 2019 vs year ago
Sectors: Beverages, Food, Dairy, Homecare, Health & Beauty

Coca-Cola and Lay’s dominate Out-of-Home brand rankings

For the two OOH rankings, looking at Non-Alcoholic Beverages and Snacking Foods, we analysed CRPs from our OOH panels in Brazil, Chinese Mainland, France, Indonesia, Mexico, Portugal, Spain, Thailand and the UK. The CRPs collected through these panels are totally incremental to the CRPs from our take-home panels and give brands in these categories a holistic view of how often they are chosen.

Coca-Cola, which also tops the main Brand Footprint report this year, is the clear winner in OOH beverages, registering a +2% growth, mirroring its in-home CRP performance where the brand saw slight growth for the first time in many years. Pepsi remains at #2 and gets over half (56%) of its CRPs from the OOH channel, whilst Coca-Cola gets 46% from OOH.

Source: Kantar, Worldpanel Out-of-Home purchase panels
Countries: Brazil, Chinese Mainland, France, Indonesia, Mexico, Portugal, Spain, Thailand, UK
Time period: 12 months ending October 2019 vs year ago
Sectors: Non-Alcoholic Beverages

In the Snacks ranking it’s little surprise that potato chips dominate with four brands in the top 10, including Lay’s at #1 (along with Cheetos, Doritos and Ruffles). It’s worth noting that all four of these brands get less than half of their CRPs from OOH outlets, indicating that they have been less affected by the decline in OOH during the lockdown.

While many OOH outlets are opening up, this sector faces an uncertain future. The grocery sector is unlikely to replace the lost value from the OOH channel, driven in part by a large difference in price. Brands with a high proportion of sales in OOH will need to establish other routes to market to recoup losses, such as direct-to-consumer or takeaway services.

Source: Kantar, Worldpanel Out-of-Home purchase panels
Countries: Brazil, Chinese Mainland, France, Indonesia, Mexico, Portugal, Spain, Thailand, UK
Time period: 12 months ending October 2019 vs year ago
Sectors: Snacking Foods (including ice-cream)

As consumers continue to adjust to new and different ways of shopping and purchasing, brands will need to understand where this FMCG spend is going, how much of it comes from online and how much from OOH, and ultimately, how important these two channels are for the overall health of a brand.

Notes to editors: CRPs are based on take-home purchasing done online. The CRP measurement is a combination of two metrics – penetration and consumer choice.

• After a surge of 6 million SVoD sign ups during the 3 months to April, which covered the early COVID-19 lockdown period and launch of Disney, new subscriptions have fallen back to a more normal level, hitting 826k in Q2.
• Amazon Prime Video led in new sign ups, securing 45% share over the quarter, with performance particularly strong amongst first time SVoD subscribers, driven up by free trial promotions.
• 22% of new subscriptions were for Disney+, a fall from the 52% it achieved in its UK launch quarter
• Disney+ saw a steep rise in lighter users, reflective of many UK schools returning back during the second quarter.
• Overall subscription stacking edges down as consumers start to show signs of drop multiple platforms
• Netflix planned cancellation rate continues to fall, hitting just 2.2%
• Netflix continues to dominate in customer advocacy, with a Net Promoter Score of +46, but Amazon Prime Video sees a big increase vs last quarter, in a clear sign of progress in closing the gap vs. the market leader.

Netflix continues as the most popular streaming service for subscriptions, whilst Disney+ growth is showing signs of easing off, after a bumper launch quarter. Given Netflix’s wide reach across the British population, it is no surprise that it dominates the most enjoyed content list with Ozark the #1 series over the quarter. Interestingly, Money Heist, came in #2 despite being subtitled, highlighting Brits’ appetite for foreign language content, whilst the now infamous Tiger King made it into the top 3 for 2 consecutive quarters. The largest contributor to new SVoD subscribers in the quarter were Gateway subscribers, those taking out an SVoD subscription for the first time, contrasting with the first quarter, where stacked subscribers, those taking incremental SVoD subscriptions, were the single largest group.

It is no surprise that Q220 didn’t see a repeat of the huge SVoD subscriber boost seen in the first quarter, which had the highly unusual combination of Disney+ launching and the UK in lockdown for the majority of the period. Amazon Prime took the highest share of new subscribers in the quarter, with the increase in overall online shopping as a result of Covid-19 measures, likely helping to make Prime membership, and it’s free delivery system, a more attractive proposition to British consumers.

Netflix continues to lead the way in overall customer advocacy rates, but Q220 has seen a big increase in advocacy amongst Prime Video subscribers with Outlander, Little Fires Everywhere, Bosch and Star Trek Picard the key titles driving this performance.

Whilst most platforms have seen usage fall slightly in the second quarter, as life in the UK edges back to normality, Disney+ in particular has seen a notable increase in lighter users, as schools begin to return back.

Notes

Based on a longitudinal panel of 15,000 consumers and boosted by 2,500 new subscriber interviews each quarter, the service is designed to help the broadcast industry and investors understand the full consumer journey for digital video subscription services.

Kantar Entertainment On-Demand is delivered by the same team that provides the world’s leading mobile phone manufacturers with global mobile phone purchasing and usage trends. It is the only subscription service providing both quarterly installed base and new subscription market share alongside deep analysis on purchase motivations, including named content, customer experience, and diagnostics on ‘at-risk subscribers’ as well as guidance on acquisition and retention strategies. Find out more here.

Modern trade (including hypermarkets, supermarkets, and convenience stores) fell by 1.4% in the latest 12 weeks compared with last year. Despite a declining overall share for modern trade, the smaller and mini supermarkets managed to grow by 10.7%. This was due to a significant uplift in both shopper numbers and purchase frequency. Consumers favoured local shops, stocked with essentials and a good range of fresh food, during this time.

Ecommerce on the other hand, continued its rapid value growth to reach 46.6% in Q2; this was even faster growth than last year. As COVID-19 continued to impact consumers’ visits to bricks and mortar stores, ecommerce won consumers’ confidence. This was due to the key benefits this channel delivers such as safety, convenience and product choice. In Q2 2020, ecommerce accounted for 26% of total FMCG spend in China.

Top retailer performance

In the past 12 weeks, major retailers have reacted rapidly to the challenges from both the booming ecommerce channel and the COVID-19 pandemic. They have done this through the expansion of their neighbourhood stores, strengthening the fresh food offer as well as using new technologies and omni-channel deployment to enable closer engagement with their shoppers.

Among the top players, Sun Art maintained its leading position thanks to RT-Mart’s recovery, recording a market share of 7.2%. Despite a lukewarm performance in the total market, RT-Mart was able to drive shopping frequency by tapping into Alibaba’s Online-to-Offline infrastructure and shopper traffic from Taobao.

Yonghui maintained a robust growth of 19% in Q2, achieving a historic market share of 4.9%. Most other regional players showed an equally strong performance. Bubugao group achieved a remarkable growth of 10.9% in Q2, driven by an enlarged shopper base. To achieve this, Bubugao has not only expanded its fresh food range, but also offered the choice of both store collection and home delivery to further attract new shoppers.

Online-to-Offline continues to grow

In Q2 2020, nearly 30% of Chinese urban households purchased through Online-to-Offline (O2O) platforms. This was lower than during the peak of the COVID-19 pandemic in China during Q1. As the market in general showed booming demand for home delivery, retailers have intensified their investment in O2O services through self-run platforms, Wechat mini-programs or closer cooperation with Ele.com, Meituan, JD.com and Dmall etc.

The leading market players, Hema, RT-mart, Vanguard, Wal-Mart and Yonghui, are contributing nearly one quarter of total FMCG Online-to-Offline sales. It is worth noting that Hema is the only big player that was able to continuously grow shopper visits after COVID-19. In recent months, Hema opened its first mini store in Beijing after a one-year experiment in Shanghai. By focusing on daily consumption products e.g. fresh and ready-to-eat food, Hema Mini is able to meet the daily needs of neighbourhood shoppers at a higher investment efficiency.

Live streaming pushed ecommerce to new highs

In the latest 12 weeks ending 12th June 2020, over 70% of Chinese households bought FMCG online. Robust penetration and frequency growth were observed in both upper and lower-tier cities. Alibaba led the market growth, with a significant penetration uplift of 14 percentage points (ppts) compared to the same period last year. Pinduoduo was also strong in attracting new buyers. Its penetration reached 13.2% in Q2, up by 7.3 points compared to the previous year, further narrowing the gap with JD.com.

This year’s 18-day 618 mid-year shopping spree continued to be a must-win battlefield for ecommerce giants. Live streaming played a more crucial role in shopper conversion which was a difference from last year. After Alibaba’s cooperation with Douyin, JD.com made the move to partner with Kuaishou just before the 618 festival. This was to further capitalise on the incremental revenue that live streaming can bring as well as tapping into lower-tier cities more where Kuaishou has strong viewership. Streamers range from store clerks, influencers and government officials to company CEOs. Besides heavy promotions that are offered during livestreaming, competitors like Pinduoduo and Suning also boosted live sales by holding super shopping galas with celebrities from hot TV shows. COVID-19 has significantly accelerated live streaming ecommerce and it is here to stay.

 iOS displays strong year-on-year sales share performance in Q220; the launch of iPhone SE (2nd generation) hits the right spot with consumers and the popularity of iPhone 11 continues. Both iPhone SE and iPhone 11 interchangeably take the top 1 and 2 model seller spots in EU5, US, Australia, Japan and even in China, where Huawei is almost half of smartphone sales, iPhone 11 is the number 1 model sold. Samsung A series sales performance continues in positive strides, with 2019 A series out-performing sales of A series 2020 launches. The appeal of A series has left a tough act for Samsung S20 flagship to follow; of the EU5 markets, S20 flagships only appear in the top 10 model sellers in Great Britain.

The desire for lower cost smartphones is a trend we have been monitoring closely for a while; from the category disruption caused by Huawei, the rise of Chinese brands, Samsung A series relaunch and now to the launch of iPhone SE. The emphasis on high quality smartphones, at a fraction of flagship prices, couldn’t be more relevant at a time when many consumers are feeling financial pressures as a result of COVID-19. In EU5, Xiaomi achieves phenomenal year-on-year sales growth this quarter, up 6 share points and overtakes Huawei to become the third most sold brand. More specifically in Italy, Xiaomi makes up 24% of sales share, just one share point shy of Samsung. In Spain, Xiaomi takes 40% sales share, leaving a gap of 18 share points to the next competitor, Samsung.

Since Google announced it was pulling Huawei’s Android license, Huawei sales have been diminishing across Europe, Australia and Japan. Meanwhile, support for the local brand in China prevails, accounting for 48% of sales (+5% points year-on-year). Surprisingly, the distribution of brand shares has not gone in favour of Samsung as iPhone SE and Xiaomi disrupt the category. Across all markets covered, Samsung share only grew in Great Britain.

As Huawei struggles to match sales performance of last year, it experiences yet another setback in Great Britain; this month, the UK government announced the ban of Huawei from its 5G network. This not only creates physical barriers for the brand’s intended future launches, but also mental barriers for consumers. Huawei’s association with being a national security concern undoubtedly will raise eyebrows; particularly with increasing publicity around data security. While not yet a top-ranking feature-specific reason for smartphone purchasing, this could change, especially with data security/privacy being heavily focused on at Apple’s developer conference.

Already among future smartphone buyers, we see Huawei’s brand preference share declining, the recent announcement is likely to hurt brand performance further. Xiaomi, as the next competitive Chinese brand, is likely to capitalise from the situation as well as other emerging Chinese brands such as Oppo, OnePlus, RealMe and the likes.

As many countries enter a second wave of the pandemic, it’s tough to visualize when the end-in-sight may be. Fortunately, only a small portion of consumers plan to cancel their plans to buy a smartphone (no more than 12% across all markets). Instead, most consumers will buy as originally planned or delay their purchase. Delayed purchasing implies that the average length of smartphone ownership will increase.

There is also a portion of consumers who plan to spend less. With Samsung focusing on A series and Apple on iPhone SE (2nd generation), it puts these giants in a desirable position for consumers seeking low/mid-tier devices (Huawei’s stomping ground), outside of Chinese brands. Although cannibalization is likely, demonstrated by Samsung A series relaunch last year, driving brand loyalty is key for manufacturers as the category becomes more brand fragmented and price tiering distinct. When consumers switch brands, manufacturers will have to wait a whole upgrade cycle (approximately 24+ months in most markets), before the opportunity to win them back arises – and a lot can happen in 2 years.

However, there are signs that shoppers are tentatively beginning to return to pre-lockdown behaviour as restrictions were eased and non-essential retail was reopened in the latest four weeks.  Emer Healy, retail analyst at Kantar, says: “We are beginning to see some people cautiously return to pre-Covid habits.  Grocery sales growth over the latest four weeks slowed to 17.8% as shoppers started to spend less on food for their fridge and more on eating and drinking out.  But while some trends are reversing, it appears that others are here to stay.

“Shoppers are continuing to treat themselves at home, with sales of savoury snacks and confectionery up 45% and 35% respectively in the most recent 12 weeks.  In an uncertain time, people looked to tried and trusted favourites to provide their stay-at-home comforts.  Brands outpaced own-label alternatives and an additional €345 million was spent on household names in the latest three months.  Homegrown Irish brands like Barry’s Tea, Keelings, Kelkin and Keogh’s all experienced a sales boost as shoppers turned to much loved classics.”

Aldi was the major beneficiary of the run on branded goods.  Its branded sales increased by more than half which helped the retailer to grow by 20.9% year on year.  It was also a record breaking few months for Lidl, which celebrated its 20^th anniversary in Ireland over the latest period and marked the occasion by recording its highest ever market share of 12.7%.

Elsewhere there was further evidence to suggest that lockdown habits will stand the test of time.  Grocery sales through digital platforms soared by 123% year on year as the pandemic continued to encourage demand for online shopping.  Emer Healy continues: “It goes without saying that lockdown had a major role to play in driving more shoppers to try online grocery shopping, and it looks like the boom is set to continue.  An additional 75,000 shoppers purchased groceries online over the past 12 weeks, contributing €38.9 million to the channel.”

August may nearly be upon us, but for many international travel is off the table and the nation is preparing for a summer of Irish staycations and housebound holidays.  Emer Healy comments: “Irish people are being advised to holiday in Ireland this summer, and while the latest four weeks would normally be prime time for holidaying abroad, staying put means that sales of sun cream declined by 66%.” 

People continuing to spend more time at home also meant sales of alcohol in supermarkets grew by 76% in the latest twelve-week period.  Emer Healy continues: “Although people are free to visit pubs and restaurants with the easing of restrictions in recent weeks, limitations on group size and time allowed at the table are potentially contributing to the continued boost in take home alcohol sales.  And with many of us attending fewer social gatherings, as well as continuing to work from home, deodorant sales are also down 15% compared with the same time last year.”

Among the traditional big three Irish retailers, fast grower SuperValu claimed the biggest market share for the fourth month in a row and saw sales rise by 30.9% as it remained the only major grocer not to experience reduced footfall in the latest 12 weeks.  Tesco’s typically larger stores allowed it to capitalise on bigger trolley shops and it grew by 20.7% to hold a 21.1% share of the market.

Building on its traditional strengths, Dunnes recorded the highest spend per buyer of all the grocers as shoppers parted with an additional €12.24 per trip on average and continued to increase their trip sizes.  The retailer recorded growth of 14.6% this period.     

Kantar Worldpanel and Bain & Company’s ninth annual 2020 China Shopper Report Vol 1 reveals that in the first quarter of 2020, consumers spent less because of COVID-19. FMCG spending dropped by 6.7%, the biggest decline on record.

The report has tracked the shopping behaviours of Chinese consumers since 2012, creating a long-term view across 106 FMGC categories purchased for home consumption in China. The report analyzes the key 26 categories that span the four largest consumer goods sectors: packaged food, beverages, personal care and home care. Combined, these sectors represent 80% of all FMCG spending. In 2019 the value of packaged foods rose by 1.9%, beverages grew by 2.9% and, in line with the two-speed pattern, personal care categories grew 11.8% while home care registered 9.4% growth.

E-commerce grew by 35.2% in 2019, largely at the expense of hypermarkets and grocery stores, which declined by 3.4% and 7.2% respectively. Convenience has been a big reason for the shift to online retailing in China. This is reflected in the widespread adoption of online to offline retail (O2O), which now represents 4.3% of total FMCG value share and is playing an increasing role in offline channels. Online channels experienced 19% year-on-year growth during the first quarter of 2020, while offline sales dropped by 13%.

The pandemic has hastened the move to value brands that we identified in 2019 and accelerated the shift to online channels. Consumers, quarantined at home because of the COVID-19 pandemic, had no choice but to buy online, with many opting to continue even after stores opened.

Virtually non-existent three years ago, live streaming sales also more than tripled in 2019 and now account for 4% of total online retail sales and about 1% of total retail sales. The increasing number of online festivals and the steady shift to online also contributed to higher promotion rates for most categories in 2019. This is especially true in the case of personal care, home care and the baby categories. Overall, online sales on promotion grew from 40% to 43% in 2019. Meanwhile, offline sales on promotion remained much lower, at 23%, in the same period.

Brands and retailers will have to learn to navigate the uncertainties presented by a post COVID-19 world as growth will be more difficult to attain for the rest of the year and beyond. The path to recovery will be different for every brand as it depends not only on how the category has been impacted but also how consumer needs will change in the future. It is vital to keep monitoring how consumer purchase behaviors evolve to form a strategy of how to grow in the time of the ‘new normal.’

FMCG categories have reacted to the ongoing COVID-19 pandemic in various ways with recovery taking different shapes:

A first group of categories, including personal wash and soy sauce, boomed during the pandemic and have continued expanding in the recovery. These were widely used in stay-at-home situations. Once restrictions eased, consumers remained focused on health and a desire to pursue at-home activities which continues to strengthen sales.

A second group of categories – frozen food, packaged water and household cleansers - boomed during the lockdown but have since stabilized. Consumers stocked up for the pandemic and had enough on hand after it ended.

A third group endured a V-shaped recovery, with sales of beer, skincare and pet food dropping dramatically during the pandemic, only to recover quickly, as consumers felt the need to re-purchase.

The final group, non-essential categories such as makeup and impulse categories such as candy, declined but are slowly improving in an L/U-shaped recovery.

Facing an uncertain future, brands need to rethink their strategy. Those that closely monitor and re-evaluate the market, industry and consumers spending patterns in the post-COVID economy are better positioned to build a product portfolio with the right value propositions and pricing.

Successful brands must also review their innovation pipeline to accelerate new products relevant in a post-COVID-19 environment and ensure they cover both premium and value segments. Additionally, brands should implement a 4-D approach: Design for China, Decide in China, Deliver at China speed and Digitalize the China business. Channel strategy is key, in particular online, O2O and live streaming in order to build trust and local relevance with China’s consumers.

Over the last few years these brands have become as familiar to consumers in many markets as the likes of Apple and Samsung. They have reshaped the traditional mobile phone price tiers progressing from unknown to mainstream. The question now though is how much more they can grow and whether the recent COVID-19 pandemic will have an impact.

However, the rise of Chinese smartphone brands has been met by challenges; the China/US trade war, Google’s announcement to pull Huawei’s Android license and more recently the United Kingdom government’s banning of Huawei from its 5G network. At least for Huawei, this will limit their future growth potential across many markets.

The following paper draws on data from Kantar’s Worldpanel ComTech panel and considers:

• Current market share of the Chinese brands globally, contrasting the EU5 (UK, France, Germany, Spain and Italy) with the US and Australia.
• Insights into consumer sentiment in the wake of the pandemic and how this might affect their future buying behaviour.
• The impact of Chinese brands on the market leaders and the future role of the premium sector.

Looking at the most recent four weeks, however, the picture is more nuanced, with signs that shoppers are embracing new freedoms and cautiously returning to their pre-lockdown behaviours.

Fraser McKevitt, head of retail and consumer insight at Kantar, comments: “As lockdown restrictions are gradually eased and non-essential retail outlets re-open, some consumers are slowly resuming their pre-Covid routines and shopping habits.  This meant year-on-year supermarket sales growth decelerated in the most recent four weeks to 14.6%, down from 18.9% in June.  However, we are clearly a long way off a complete return to normality.  Footfall was still 15% lower during the past four weeks and the average spend on a supermarket trip was £25.05, 35% more than the same period last year, as most people continue to eat more meals and snacks at home. 

“Despite pubs, bars and restaurants re-opening recently, more than half of consumers say they are still uncomfortable with visiting a pub and 42% with visiting a café or restaurant*.  As a result, take-home alcohol sales were still up by 41% this month as people were unable or avoided drinking out.  The cost of working from home is also starting to add up for many.  Shoppers spent an additional £24 million on tea and coffee during the past four weeks and £19 million on biscuits.  In comparison, sales of some products that were in huge demand as the nation entered lockdown in March, are now only marginally higher than last year – with healthcare up by 2% and household products by 3%.”

There are signs that shoppers might be growing more confident and travelling further afield for their weekly shop.  Fraser McKevitt explains: “Convenience stores were a lifeline for many people in the early days of the crisis, providing essential supplies close to home.  Sales from these types of stores are still up by more than a quarter year on year, but they attracted 2.6 million fewer shoppers through their doors than at the peak of lockdown in April.  Consumers are clearly growing more comfortable getting in their cars or taking public transport, as the average distance travelled to a grocer has gone up to 4.9km, a 10% increase from the April low**.”

Co-op, the largest player in the convenience sector, achieved a market share of 7.2% during the past 12 weeks, as its sales increased by 30.6% year on year.  Independent convenience stores, including those operating under names such as Spar, Nisa and Premier, grew sales by 59.5%.

The growth in online grocery sales continues and increased to 92% this month, marginally higher than the previous four weeks.  Fraser McKevitt comments: “Although restrictions have eased, more than one in five households still made an online order during the latest four weeks.  The channel now accounts for 13.0% of all grocery sales in Great Britain, which is up from 7.4% in March and reflects a significant increase in capacity by the grocers.  Ocado sales rose by 45.5% during the past 12 weeks, benefiting from its loyal customer base increasing their shopping frequency by a third compared with last year.  Ocado’s market share rose by 0.3 percentage points to 1.4%.”

The challenging economic climate hasn’t yet had a meaningful impact on the items shoppers are picking up in store and Fraser McKevitt explains: “Even with the uncertainty that many consumers are facing, branded goods, which are typically more expensive, are outperforming cheaper, own label alternatives and grew sales 20% this period.  In fact, it is the number one brands in each category that are typically winning share from rivals.  Of the retailers’ own ranges, it’s the more premium lines, such as Tesco Finest or Sainsbury’s Taste the Difference, that are growing fastest.  It seems shoppers are looking for small ways to treat themselves at home.”

Promotional activity at the grocers picked up in the latest four weeks, with 29% of sales including some type of discount.  Fraser McKevitt comments: “Retailers scaled back promotions at the start of lockdown as they prioritised serving as many customers as possible and keeping shelves full.  Now, they are starting to put the emphasis back on deals and collectively helped the average household save £45 on groceries this month.  Promotional levels are still behind the pre-crisis level of 31% but, particularly given that the 2008 recession led to shoppers seeking out more discounts, we expect the grocers to bring in more enticing offers to attract cash-strapped shoppers in the months ahead. 

All of the big four experienced strong sales growth in the past 12 weeks, in line with the overall market trend.  Morrisons, up by 17.4%, grew ahead of the market and gained market share for the first time since 2015, now standing on 10.3%. Tesco sales rose by 15.1%, Sainsbury’s by 13.5% and Asda by 11.0%.

Iceland’s growth reached a new record high of 34.1%, and its market share was up from 2.2% in 2019 to 2.5% this year.  Over the 12 weeks, the total frozen food market has increased sales by 22%, the second fastest growing category behind alcohol.  Lidl sales rose by 17.3% and Aldi’s by 13.0%, with the discounters collectively holding 13.6% of the market.  Waitrose sales increased by 10.9% to hold a market share of 4.7%.

An update on inflation

Grocery inflation now stands 3.6%† for the 12-week period ending 12 July 2020. Prices have been rising since the 12 weeks to 1 January 2017, following a period of grocery price deflation which ran for 30 consecutive periods from September 2014 to December 2016. Prices are rising fastest in markets such as ambient cooking sauces, fresh bacon and canned colas while falling in fresh poultry, butter and bread.

*Based on Worldpanel Plus survey of 55,812 consumers Thursday 2 – Wednesday 8 July

**Derived from Worldpanel Plus sample of more than 100,000 trips per week with store location based on postcode

• FMCG shopping via ecommerce grew a massive 41%; from 8.8% of value in 2019 to 12.4% in the second quarter of the year.
• The collapse in out-of-home (OOH) spending resulted in Snacking and Non-Alcoholic Beverages spend falling by between 10% and 30% in major markets
• The transfer of OOH eating to in-home increased in-home eating occasions by 21% - generating new category opportunities for brands.
• A new era of ‘Liquid Retail’; where the lines between home delivery, ecommerce, in-home and OOH are fluid and will make FMCG market competition fiercer than ever.

This week’s ten behavioural insights around COVID-19: 

1. Google mobility data shows a high degree of grocery shopping variability across the world – from “Normal”, to below 50%. Some countries are returning to normal trip levels – USA and Brazil for example – while others remain in lockdown, shopping only when it is essential (like Peru).
2. COVID-19 has re-invigorated grocery ecommerce, especially in Europe. We analyse the online share of FMCG spend in 2018 and 2019 and the forecast for 2020, with >20% growth for the channel in all regions. We used to look to the USA to see future trends – but now we go to China! There is still more room for growth again in Europe.  
3. Next we look at which categories had the highest share of trade online, with certain CPG categories more suited to this channel. The evidence from the ecommerce giants – China and South Korea – shows the way. Hygiene and Health look like good future candidates – will a supplier find a winning formula? We expect many will try given the expected ongoing growth.
4. When marketing works, it usually works amongst everyone. This is true when we look at the penetration of the online channel across different lifestages in the UK. The extra growth amongst the oldest cohort is astonishing – with penetration doubling. Will these older consumers stay? The more they learn through experience that ecommerce works for them, the more likely the answer will be yes.
5. Have we moved to famous trusted brands as expected? We see that the Brits have turned to brands during the crisis, whilst there is more consistent growth across both brands and own label in Spain. The picture here is not as clear as the move to ecommerce: it could go either way. Factors like household income and how retailers have reduced ranges to cope with the extra demand are just as important as brand trust.
6. If you had to cut $20 dollars a week on your grocery bill, what would you do? We show what coping strategies households are deploying in order to save money. Simply buying less is the most common way people cope with less money to buy groceries. So, despite genuine alternative strategies, going without and reduced volume will be the primary driver as how households under financial pressure will manage their grocery spend.
7. We will reduce our CPG spend if we have less income. However, if the employed – still the vast majority of households in a recession – remain flat then CPG remains fairly protected. This is why it is the fearful employed (who react like the unemployed) that are of greater concern.
8. The level of promotions in Europe is at its lowest for some time, with a clear drop in the UK, France and Spain when lockdown began. This reduction has led to ‘higher prices’, but we expect a return to previous levels – potentially higher given recessionary and competitive retail price pressures. One to watch through the year…
9. In our second to last insight we show the growth patterns of the leading hand soap brands (including private label) in the UK, with much higher penetration to compensate for reducing frequencies. We see a really unusual pattern. If it always worked this way then the How Brands Grow book would have to be re-written! This is what happens when people don’t care what brand they buy, they just need any soap to wash their hands.
10. Despite people saying they are considering fewer brands given the current shopping conditions, the reality is, even when we are online, our brand loyalty levels have reduced across all channels. Buying more products in a category gives us more chances for more brands to be chosen. We might not be considering more brands, but we don’t just buy one brand, we buy from several.

Growth accelerated slightly in the most recent four weeks to 25%, just behind last month’s record level, as Ireland moves into the next stage of its lockdown.

Emer Healy, retail analyst at Kantar, comments: “We haven’t quite shaken off the habits of lockdown life just yet  – people are still making fewer, larger trips to the supermarket.  But there are signs that Irish shoppers are taking their first tentative steps back to normality. 

“As restrictions start to ease, including the lifting of limits on travel today, people are growing more confident and the number of shopping trips inched up slightly in the most recent four weeks, by 2.3%. When in store, shoppers are continuing to buy more than in normal times and the average person has spent €204 extra this June than last year, on average €30.77 each trip.

“There are indications of cautious optimism in Ireland.  Despite the months of lockdown, 40% of Irish consumers say they feel financially comfortable and that’s reflected in how they are shopping.  With some of the usual ways to treat themselves off limits, they’re trading up to  branded goods in store, spending an additional €381m on these products compared with last year.”

Online demand continues to soar with an additional 99,000 households receiving a delivery in the latest 12 weeks.  Emer Healy comments: “An extra €70.9 million was spent online during the past 12 weeks, which is a year-on-year increase of 114.3%.  Retailers will now be looking ahead and thinking how they can retain new online shoppers when things return to normal.  The answer to that is likely to be in different demographics – retired households for example, where their share of online grocery sales now sits at 14.1%.   

“Younger consumers appear to be holding back from online orders so that more vulnerable groups can benefit from them – taking heed of advice from the grocers. Nearly 40% of shoppers said this is the main reason they haven’t ordered groceries online during the lockdown*.  Despite the growth, it certainly isn’t the beginning of the end for bricks and mortar outlets – 63.6% of people still haven’t shopped online and don’t intend on doing so in the future.”

People are continuing to find ways to mark special occasions during lockdown and socialise at home or in open public spaces.  Emer Healy comments: “Staying in is the new going out and take-home alcohol sales continue to boom as a result – up 93% in the most recent four weeks.  In the week leading up to the June Bank Holiday shoppers spent an additional €60m on take-home grocery categories, and a third of that was on alcohol. 

“We’re all missing our favourite restaurants and people trying to recreate those experiences at home meant sales of ethnic ingredients such as curry pastes, coconut milk and Mexican meal kits were collectively 34% higher this month.  While brunch lovers pushed bacon sales up 25%, eggs up 36% and sausages up 35% year on year.  People are also starting to enjoy the freedom of meeting friends and family outside of their home and picnic favourites were in high demand.  Compared with last year, sales of dips were up 25%, soft drinks 42% and crisps 52%.”

An update on the grocers

Over 40% of Irish shoppers are now shopping closer to home and independent outlets are benefiting from this – growing sales by 44.8% during the 12-week period.  People are depending on local suppliers more and they spent an additional €2.4m at greengrocers and €11m at butchers compared with the same period last year.

SuperValu continues to feel the advantage of its large store estate combined with this change in shopper behaviour, holding the highest share of the market at 22.9% and achieving the fastest year-on-year growth of 35.2% during the latest 12 weeks.  SuperValu also remains the only retailer not to experience reduced footfall in the last 12 weeks and welcomed an additional 53,000 shoppers into its stores. 

Elsewhere, Tesco’s sales grew by 22.2% to hold an 21.5% share.  This was driven by consumers significantly increasing the amount they buy each trip – picking up five additional items each visit and spending more as a result. 

Dunnes customers also added more to their baskets during this period – an additional 5 items per trip and spent an extra €14.23 per trip compared with last year, generating strong overall growth for the retailer of 15.4%.

Lidl boosted its sales by 29.7% while Aldi’s were 20.4% higher than last year, generated by customers doing larger shops at both retailers.  Lidl continues to experience its strongest growth in Dublin and Aldi from Munster.

* Kantar LinkQ survey of 3259 people in Ireland between 15 and 25 May 2020

The service has also highlighted the following consumer behaviours in the three months to April:

• Amazon’s subscriber share of 40% is split across its Prime Music and Music Unlimited services
• While the Amazon Prime Music service is available for free to Prime subscribers, only 22% of subscribers use the service, indicating significant room for growth
• Amazon Music Unlimited is responsible for 43% of Amazon’s overall share and is growing faster than the Prime Music service
• Smaller services such as Deezer, YouTube Music and Tidal claim 15% of music service subscribers. Typically, these subscribers also have at least one other subscription service
• Spotify is the main driver of category growth, with 47% of new subscribers signing up to music streaming for the first time
• While access to podcasts is an important feature for 12% of new Spotify subscribers, features such as the range of artists, the ease of creating playlists and the music sound quality were cited as more important
• However, the NPS rating for podcasts is low at +5, showing an area of potential improvement for Spotify when compared to its overall rating of +30

With its dominance in the audio subscription market, Spotify’s success means it is now the main driver for growth in the audio streaming market, with 47% of new subscribers also being completely new to music streaming. This dominance has come at a cost for other services. Besides Amazon’s two services – Amazon Prime Music and Amazon Music Unlimited – other brands have only secured meagre market share, totalling 15% of the total UK market between them, indicating there is significant opportunity to expand their services and portfolio if they want to attract more users.

Spotify is the market leader in audio streaming, but there continues to be room for all brands to extend their market share. While podcasts are still a relatively niche offering for subscription streaming, with only 12% of subscribers saying it is an important feature to them, Spotify’s exclusive licensing agreement with the Joe Rogan Experience indicates it plans on building out this capability, something other brands should pay close attention to.

The findings also highlight differences in how consumers listen to content, and how it influences the service they subscribe to. Buying wireless speaker systems have been an important driver to new subscriptions to Amazon Music Unlimited, specifically voice assistant devices. Spotify and Apple Music sign-ups are however driven by mobile devices.

Hardware is driving sign-up to audio streaming services. It demonstrates that there is an affinity between purchasing a device and subscribing to a new service. While many music streaming services already have partnerships in place, it’s clear this strategy needs to continue and expand where possible to grow market share.

Based on a longitudinal panel of 15,000 consumers and boosted by 2,500 new subscriber interviews each quarter, the service is designed to help the broadcast industry and investors understand the full consumer journey for digital video subscription services. Additional findings from the research reveal:

• In Q1 2020, 6.4% of individuals subscribed to a new service. 40% of these new subscribers were for Spotify, 25% were for Amazon’s premium Music Unlimited service
• 44% subscribe to a music streaming service, with each having 1.5 subscriptions
• Spotify and Amazon Music Unlimited have the most satisfied users, with Spotify’s NPS rating the industry highest at +30. Amazon Music Unlimited is at +25

Entertainment On Demand is designed to help the broadcast industry and investors understand the full consumer journey for digital video and music subscription services. It is the only subscription service providing both quarterly installed base and new subscription market share alongside deep analysis on purchase motivations, including named content, customer experience, and diagnostics on ‘at-risk subscribers’ as well as guidance on acquisition and retention strategies.

Sales growth over the four weeks to 14 June accelerated to 18.9%, up from 17.2% previously, with shopping patterns still disrupted compared with more normal times. The boost has been led by online sales, which have continued to accelerate, and convenience stores, which took £1.6 billion through their tills during this period. Despite the jump, grocers are still navigating a steep drop in the amount of food and drink bought on the go, which was down by a third* in early June. These numbers are not covered in today’s take-home sales data, but were worth £347 million to grocers** in June last year and so represent a considerable shortfall.

Online grocery’s strong performance continued this month, with sales rising by 91% over the four weeks. The huge increase in available delivery slots across the sector meant nearly one in five British households bought over the internet in the month to mid June, totalling 5.7 million shoppers. The cumulative impact of lockdown has helped Ocado to achieve its highest ever market share – hitting 1.7% over the past 12 weeks thanks to an industry-high sales growth of 42.2%. 

Convenience stores have become an increasingly important outlet for shoppers during the lockdown – be they independent retailers, which are growing at 69.3%, or the smaller formats of major outlets, for example Tesco Express and Sainsbury’s Local. Convenience stores accounted for 14.7% of all sales in the past four weeks. This is still considerably higher than normal levels, but it has receded from April’s peak of 16.3%. Co-op has reported strong sales as a result, with its network of local stores helping to accelerate growth to 34.5% over 12 weeks. Co-op’s market share now stands at 7.4%, representing its highest figure since March 2001.

While many of the major trends of the coronavirus period continued into June, the relaxing of lockdown rules is starting to ease the market back towards pre-pandemic shopping patterns. We’re still shopping less frequently but shoppers are gradually changing their behaviour. Households made 77 million fewer trips to the grocers in the latest four weeks compared with last year, but that’s still 19 million more than in May, reflecting the slight easing of government restrictions. Once in the shops, customers are continuing to buy more than usual, spending 42% more per trip than in June last year at £26.37 on average.

As pubs and restaurants remained closed, alcohol sales through the grocers continued to boom, growing 43% in the past four weeks. Elsewhere, good weather in June and shoppers getting the green light to meet friends and family outside their household meant picnic favourites were in high demand. Sales of soft drinks and chilled dips increased by 28% and 30% respectively. There were also signs of British consumers making the most of early summer – as ice cream sales rose by 57%, burgers by 44%, and sausages by 40%.

Safety while shopping remains a concern for many. Only 54% of people said they felt safe when visiting a supermarket or a convenience store***, with hygiene considerations impacting shoppers’ buying habits. Sales of loose foods fell by 6% over the past month. Heightened awareness of public health saw shoppers choosing pre-packed products, with retailers putting some lines in packaging and closing many fresh food counters. Consumers are also contemplating their domestic budgets. Two-thirds of shoppers are very concerned about the economic outlook**** for the rest of 2020, and efforts to tighten purse strings can already be seen in a preference among furloughed workers for budget own label lines and a move away from more premium products.

Sales at Iceland rose by 31.4% over the 12-week period. There’s plenty to celebrate for Iceland, which turns 50 this year and recently revealed a return to full ownership for Malcom Walker. The retailer now accounts for 2.5% of the market, matching its highest ever share which was recorded back in June 2000.

Meanwhile, Tesco sales were up by 12.1%, and Sainsbury’s by 10.2%, with both enjoying strong growth in their convenience estates and online operations. Asda increased sales by 6.3%, now taking a 13.9% share of the market, while Morrisons grew sales by 10.5%, with a market share of 10.1%. Lidl’s sales growth of 14.3% moved its market share to 5.8%, while Aldi’s sales increased by 8.0%, resulting in a 7.5% share. Waitrose sales rose by 8.6%, giving it a market share of 4.8%.

Notes to editors

* Kantar’s ‘Out of home’ panel records food and non-alcoholic drink purchasing, wherever it is bought and consumed, that is not part of a take-home grocery shop. Data is collected from a panel of 7,500 consumers who record purchasing via a mobile app. The on-the-go sales referenced here is purchasing at grocers only in the 4 weeks to 7 June 2020, derived from weekly delivery of data.

**Kantar’s ‘Out of home’ panel 4 weeks to 16 June 2019

***Findings based on continuous Kantar Shopper Satisfaction study conducted by Worldpanel Plus. More than 50,000 trip reviews submitted by shoppers each week covering all UK retailers.

****Based on Kantar LinkQ survey of 1,912 respondents conducted 6 June 2020

In the Indonesian urban edition, we cover up to 85% of total urban households, which represents 30 million households

The consumer choice observe the amount of households purchase of a brand (market penetration) and coincidence of the brands being purchased (frequency). Brand Footprint covers FMCG sectors, e.g. food, beverages, home care, dairy, health and beauty products

Several important findings:

• Highlight on the Most Chosen Brands globally
• The ranking of the Most Chosen Brands in Indonesia urban
• Key levers for growth and top brand success stories
• Some brands reaction during Covid-19

 We hope you find this report insightful, and feel free to get in touch for further information.

Understanding consumers to find growth 

Our Brand Footprint ranking of the most chosen homecare brands uncovers the innovators in the market, and the continued impact of the Mrs Hinch effect. The report covers 2019, and while this pre-dates the current crisis, the fundamentals of brand growth are more relevant than ever as we emerge from lockdown. 

• New needs: The ultimate lever for brand growth is recognising new consumer needs and proceeding to establish a new category. 
• More moments: Brands can create more moments or shopping occasions by making their products available and relevant for consumers. 
• More categories: Brands can stretch across different categories to attract buyers whose needs are not currently met by the existing functions of the brand. 
• More targets: Brands can create new variants that they know will appeal to a wider range of individual needs in order to attract new targets. 
• More presence: Brands can increase the number of geographical locations in which a shopper can see and choose their brand.

Some of the brands that demonstrated success in 2019 for each market include:

• Mainland China: Yili remained China’s most chosen brand for the fifth year running. Together with Mengniu, these two dairy brands were chosen over 1 billion times by Chinese consumers in 2019. 
• Indonesia: Indomie continues to be the number one most chosen FMCG brand by consumers in 2019, with a key strategy of playing in several categories. The brand had a 7.0% CRP (Consumer Reach Points) growth for the year. 
• Korea: Chungjungone ranked number two, having successfully pioneered snacks for the drink HMR market and widening its portfolio. 
• Malaysia: Due to its strong performance in both instant noodles and culinary aids categories, Maggi sustained its number one position in 2019, with a penetration of 85.4%. 
• Philippines: Local noodle brand Lucky Me remains the most chosen consumer brand in the Philippines, having reached nearly all Filipino homes. The brand continues to improve its existing products by adding new formats. 
• Taiwan: Local brands continue to occupy the top five ranking, with I Mei as the number one chosen brand (over 7.7 million households in Taiwan purchased the brand in 2019). 
• Thailand: Hygiene ranked in the top chosen brands list with a CRP growth of 11%. The brand was chosen more than 116 million times during 2019. 
• Vietnam: Dairy manufacturer Vinamilk was chosen the most in Vietnam (urban 4 cities and rural) in part due to its massive coverage in terms of consumer base. 

 
After conducting a special analysis of how brands are faring during the pandemic, we discovered the following: 

• There are four clusters across Asia regarding how consumers shopped before the lockdown versus after: “overly cautious”, “challenged”, “undeterred”, “road to recovery”. 
• Based on these four clusters, some markets experienced a drastic shift in shopping patterns, while other reactions were muted. 
• Categories like hygiene, cooking aids and essentials, convenience foods, and nutrition and immune-boosting products are thriving. 

Across these categories, the biggest brands across Asia are winning by riding on one or more of the five key levers for brand growth.

1. Out-of-Home occasions shifting to In-Home, resulting in
• more meals to prepare and
• the acceleration of Home Delivery through Food Tech
2. Indulgence and convenience winning over health

Join our experts to understand in depth how these shifts have caused diverse reactions to our food and drinking consumption and which ones are likely to remain in the next months.

Register for the webinar:

• 10 am (UK time)
• 4 pm (UK time)

Dairy products are ever present in most consumers’ lives, and shopping baskets, with 94% of households buying the sector in an average week. Being part of such a diverse category, often co-dependent on other food and drinks brings opportunities and challenges, and to find success it’s essential to be alert to wider consumption trends. 

Understanding consumers to find growth

Our Brand Footprint ranking of the most chosen dairy brands uncovers the role of the discounters on the market and the rise - and rise - of dairy alternatives. While the ranking covers 2019, and therefore predates the current crisis, the fundamentals of brand growth are more relevant than ever for FMCG brands as we emerge from lockdown. 

Get your copy and discover:

• Examples of how dairy brands have responded effectively to changing patterns of consumption
• How dairy brands are growing through providing a low-sugar snacking option
• The impact of shoppers’ rising environmental concerns and attitudes around health
• The rise of dairy alternatives, and how brands have navigated this disruption
• Inspiring examples of brands using the five levers of growth: more presence, more categories, more targets, more moments, new needs

Read the report today and sign up to the webinar to hear directly from our experts on how brands can find growth, regardless of the disruptions that come their way.

• Register for the webinar
• Read the report
• Explore the Brand Footprint dataset

A ranking uncovering the most chosen brands in Homecare is also following soon (18 June).

The Emergency Decree for Movement control was announced in the country on 26^th March. During this period by the 3^rd week of movement control, week ending 12^th April, average weekly grocery spend was 3% lower than pre COVID-19 levels, and this reduction continued each subsequent week to the extent that consumers spent on average 8% less on groceries during week 3 to 5 of lockdown.

There are variations in the degree and speed to which consumers adjust. Through weekly tracking of shopping behaviour, Kantar has identified 5 key facts and implications about how consumers are adapting, and therefore what brands can do to be on the winning side of the future. 

5 key facts to inform future planning

1. Budgets are managed by shopping less often for groceries, and lower income consumers are quicker to change and cut back
2. Budgets are managed by prioritising what to spend more on, what to spend less on and this differs by income level.
3. Budgets are managed by changing product choice and trading down, yet consumers will still trade up or buy more (upsize) if they are engaged. How consumers engage to spend more differs by income and spending power.    
4. Consumers don’t necessarily want more price promotions.
5. Being available in the right channels is paramount, but even channel availability does not guarantee success if the consumer need is not there.

Download the paper through the link at the right side of this page and get in touch with our expert if you’d like to learn more.

Following eight weeks of enforced confinement and the first few days of the restrictions being lifted, Kantar analysed the behaviour of consumers who were already starting to adapt to the new normal.

During the weeks of lockdown, almost seven out of every 10 people confirmed that they “would return to consuming products outside of the home as soon as possible”, thus assuring a rapid recovery of their former habits.

Since lockdown rules started to be eased, the number of occasions when people consume outside of the home has started to gradually increase. By the third week of easing, Spanish consumption outside the home reached on average 44% of the levels in the five weeks prior to the health crisis.

It should be noted that this recovery is progressing more slowly in the metropolitan areas of Madrid and Barcelona, where phase 0 of the restrictions stayed in place for an additional week.

This recovery of Out of Home purchases seems to be replacing at-home consumption rather than home delivery, due to the fact that some restriction of movement is still in place. Nevertheless, as the restrictions continue to be lifted, people are still maintaining a 16% increase in at-home consumption occasions, a figure that confirms the importance of the new habits that have arisen during the crisis.

Although the increase in at-home purchases is slowing down, in the first two weeks since restrictions started to be lifted, there has been a 22% increase in total spending on FMCG compared to pre-crisis levels.

The new shopping channels are here to stay

Although shopping and consumption are changing as we progress through the lockdown phases, Kantar has observed how some changes due to the lockdown will stay. This is the case for 2.0 shopping channels, in which the growth of e-commerce and food delivery has accelerated rapidly, with sustained levels during the lifting of restrictions.

Because of the isolation phase, people had a need to use delivery services which helped to overcome fears and barriers related to these modes of shopping. More than 700,000 households have shopped online and almost 8% of the Spanish population have used home delivery for the first time during the lockdown, which means more than 2.6 million new shoppers for the channel over these weeks.

Understanding consumers to find growth

Our Brand Footprint ranking of the most chosen beverage brands uncovers the key trends at play in the market. The report covers 2019, and while this pre-dates the current crisis, the fundamentals of growth are more relevant than ever for beverage brands as we emerge from lockdown.

Get your digital copy and discover:

• How brands are leaning into their healthy credentials a year on from the sugar levy
• The new flavours giving brands the taste of success
• Routes to expanding your brand across categories or reinventing the category altogether
• How brands have tapped into Brits’ moderating their alcohol intake
• Inspiring examples of brands using the five levers of growth: more presence, more categories, more targets, more moments, new needs

• The economy is becoming as big a worry as staying healthy, with 14m jobs lost already and 57% of Mexicans working in the informal economy.
• Shopping patterns are starting to return to normal in grocery at least as consumers work through the stockpiles they purchased at the start of the lockdown.
• Indulgence is on the rise and desserts are increasingly attractive, especially in Peru where 54% have learnt new dishes.
• Brazilian shoppers are rethinking where they shop with Small Self Service Retail winning on Proximity as well as the chance to avoid crowds.
• Traditional TV and virtual gaming have been a winner in Mexico with a 30% increase in the number of TV sets switched on.

What does it mean for your brand or category? Download the 10 slides and get in touch with your queries.

n the last 14 weeks we have experienced change at an intensity that couldn’t have been predicted, which means that society’s shopping and consumption habits will never be the same again.

The disruption caused by the pandemic is complicated and will not affect all sectors equally. While areas such as tourism and travel are quite damaged, there may be new opportunities in other areas, such as ecommerce and mass consumption.

This is the topic that experts at Kantar analysed in a virtual talk ‘Redefining our Action Plans for Post-Lockdown’, where they took an in-depth look at those consumer patterns that have changed during isolation, as well as the challenges that the ‘new normality’ will bring.

According to our data, the mass consumption sector in particular has seen growth rates of around 1% in 2019 to a surge of 26% since lockdown was declared. This boom in sales has had an enormous impact on the distribution of household expenditure, which is estimated to have grown by nearly 25%, suggesting that families are shifting spend which before would have been used for entertainment and eating out.

Shopping patterns have radically changed as we make fewer trips to the supermarket, but when we do, we spend 37% more. In this aspect, the chains which until lockdown had been leading sector growth, such as Mercadona or Lidl, have taken a greater hit. Local retailers, particularly regional supermarkets and chains such as Día, have capitalised on this growth, along with the online channel, which has nearly doubled its market share.

No two crises are the same, and what’s more, in this one the health component must also be considered, which is going to mean very significant changes in shopping patterns, social interaction and our way of enjoying our free time, plus whether we work from home or not, or how and when the children go back to school. All this with consumers who are longing to get back to their everyday routines.

Different behaviours for certain product categories have also been observed. After the initial rush to fill the pantry, a group of categories has emerged that Kantar has called “new normality”. These have been driven by these lifestyle changes and include: cleaning products (we clean more); bottled water (we are more cautious about what we eat and drink); soft drinks, beer, olives, nuts (we snack more at home); or pastries, biscuits and cereal (due to a change in breakfast habits). These categories are now entering nearly nine in every 10 households and experiencing an accelerated growth. At the other end of the spectrum we find those categories that the consumer now considers less of a priority, such as cosmetics or shoe-cleaning products.

What can we expect from post-pandemic consumption?

We are in a period of crisis and, in this context, we are facing a more rational, price-oriented consumer for whom promotions will play an important role, as well as the limited assortment channel. That said, household spending is very much tied to future prospects, and seven in every 10 consumers believe that their situation 12 months from now will be a better one.

To be specific, three areas are forecast to experience growth within this dual-crisis panorama. The first is in-home consumption, which will continue to grow in the new normal, especially products related to healthier, home-cooked food.  Snack times/moments of pleasure is another area which has come out a big winner (+56%) with the emergence of new spaces for in-home consumption. Out-of-home consumption will experience a recovery, although it will be much slower than desired, which means the key here will be in generating consumer confidence.

The level of uncertainty over tourism plays a crucial role in this category, with the hope that domestic tourism will compensate in part for the downturn caused by the drop in overseas visitors; in fact, according to Kantar’s data, 79.6% of Spanish households have said they will be remaining in Spain over the summer. This situation will continue to benefit in-home consumption, which means brands must be capable of defining their strategies according to these new consumption spaces.

Acceleration of known trends

In terms of what will be driving this new consumer forward, at Kantar we believe the quest for health will gain even greater prominence, despite already being a trend strongly on the rise. During lockdown we have taken better care of ourselves.

A second trend we will be focusing on the quest for pleasure, on the rise within the home to replace the lack of leisure activities and eating out.

The third of these trends refers to convenience, which has seen important gains in cooking aids such as stock, sauces or frozen foods. This inclination is likely to grow as we are able to go out more and schedules once again become tighter.

Lastly, another of the preferences that have flourished amongst consumers is the search for local products. In fact, according to Kantar’s data, 33% of consumers say they will be buying more products from socially responsible brands in the future.

The one trend that seems to be most affected by this crisis is sustainability. Despite our steadfast desire to reduce our use of plastic, during lockdown we have seen an increase in the use of items such as plastic wrapping and disposable bags.

It is also noteworthy that in this period, many consumers have been forced to change brands. This offers a great opportunity to gain proximity to these new shoppers, to get to know them better and convince them to repeat the experience.

The new distribution panorama

Distribution in Spain has had a crucial role in the pandemic, enabling all households to keep well-stocked.

Proximity and the online channel have largely set the trends during the health crisis in terms of distribution. Limited assortment chains —those fundamentally committed to distributor brands— have seen their market share shrink by 2.5 points, conceding this to smaller supermarkets in closer proximity to the consumer.

The Internet has experienced its greatest increase ever, going from creeping upwards decimal by decimal in the last few years to gaining 1.3 points of market share in the most critical weeks of the crisis. Ecommerce in particular has been one of the channels to achieve the greatest gains and is now poised before its big opportunity, not only due to its historic market share in Spain (3.1%), but also in the 15.5% increase in shoppers. Its impressive gains amongst those aged 65 and older and in fresh produce in particular proves it is breaking through the traditional barriers.

Nevertheless, all indicators suggest that these trends will return to their pre-crisis levels, provided that the health conditions permit.  The exception being the online channel, which will keep rising where there is a pull to shop in the most safe way, either locally or online.

Essential levers to take into account in the post-isolation period

The intensity and speed of change in shopping patterns is so great that manufacturers and retailers will have to overhaul their marketing and sales plans. Price will once again become an important factor, with price-rounding formats and immediate discount or additional unit promotions. What is more, the current household stock levels in certain product categories will make quantity promotions inadvisable.

In any case, innovation and advertising will remain key factors. In terms of areas to explore when it comes innovating, the health and hygiene sectors will stand out within the new normal, as well as indulgence and all that is related to the new consumption spaces created by these lifestyle changes. Finally, it will be crucial for brands to take advantage of the opportunity for a greater media audience in order to communicate with their target market, taking into account that seven out of every 10 brands that managed to grow in the previous crisis maintained their investment in advertising.

The good news is that mass consumption has a sizeable impact, and in the months to follow its importance in household expenditure is more than likely to grow. However, the changes we have seen are significant. Consumers will not be the same after the crisis, so we encourage brands to be take a very critical look at their post-lockdown plans, making a distinction between beliefs that may still be valid and those that won’t be.

This week we have focused on the consumption side of behaviour. We found that 2020 could be a big year for food manufacturers that supply grocery retailers. However, personal care manufacturers might find 2020 to be one of their most challenging years in some time.

This week’s ten insights around consumption behaviour and COVID-19 include:

1. There's been an increase of in-home meal occasions per week. In France we saw an uplift to 24 from 18 with 3 additional lunch occasions, 1 additional mid-afternoon snacking occasion and 2 additional dinner occasions. There is a similar uplift in countries such as Brazil, Spain and the UK, and this increase is in line with expectations given how often we were eating out-of-home pre-lockdown.
2. However, the total effect on spend is a reduction of ~20% in the UK and ~10% in Spain, given the higher spend per meal occasion out-of-home. So whilst we talk about food manufacturers winning it is a very different picture for those that supply the at-home occasion vs out-of-home.
3. The actual time we are taking to prepare our meals remains unchanged at 23 minutes on average. For all the talk of us now ‘scratch’ cooking, any meals taking longer to prep are counterbalanced with quicker and easier meals too. However due to the overall number of cooking occasions increasing we are spending on average 2 extra hours a week preparing our in-home meals.
4. We next examined when certain food types are being consumed throughout the day and how this compares with how we consumed these products a year ago. What we see is that consumers are finding new occasions for categories during lockdown.
5. The uplift of home delivery in the UK shows growth of over 200%, driven by six-million extra users. 66% of people say they use home delivery as a treat and reward. By choice or by necessity, home delivery has the potential to be a more permanent change.
6. If we look specifically at drinking occasions in the US, the number has remained the same. Pre-lockdown the average American consumed beverages eight times out-of-home per week. During lockdown this has dropped to four times per week, with just as many extra in-home occasions keeping the average at 37 drinks per week. Although the number of occasions hasn’t changed what’s been consumed has changed and as a result what is being spent on beverages has too.
7. Personal care is the FMCG sector hardest hit by COVID-19 and this is reflected in our usage data showing the average number of weekly occasions down by 6 per person. Whilst down it varies considerably by country, the fall in occasions is more than double in Spain at 13, whilst in the US there has been minimal impact with a fall of just 1 occasion.
8. Next, we look at which categories have seen the biggest fall in occasions. As predicted, it is the more discretionary ones most affected with cosmetics and fragrances. For both categories the trigger for use pre-COVID in 75% of times was work and socialising. In other words, leaving the home.
9. In France we have seen the number of cosmetics occasions halve during the first month of lockdown and the growth of video conferencing isn’t helping, with two in three Brits using less or no make-up on video conferencing (amongst those who have increased their use of video calls). The end of lockdown cannot come quickly enough for cosmetics.
10. Lastly, we look at some specific categories which have done well during lockdown with sweet snacking up 41% in France, baking up 61% in the UK and alcohol up in the UK, France and Spain.

Understanding consumers to find growth

Our Brand Footprint ranking of the most chosen health and beauty brands uncovers the disruptions at play in the market and the tension between natural beauty and science-based efficacy. The report covers 2019, and while this pre-dates the current crisis, the fundamentals of brand growth are more relevant than ever for health and beauty brands as we emerge from lockdown.

Get your copy and discover:

• The long-term disruptions facing the market long before COVID-19, and how brands have navigated them
• How the tension between natural and scientific approaches is playing out
• How brands are adapting to changing perceptions of beauty through their products and advertising, and standing up for issues or under-represented sections of society
• Inspiring examples of brands using the five levers of growth: more presence, more categories, more targets, more moments, new needs

Understanding consumers to find growth 

Emer Healy, retail analyst at Kantar, says: “The jump in grocery sales over the most recent three-months in large part reflects the fact that it includes both the pre-lockdown surge in shopper spend and the eight weeks of stay-at-home advice from Government, bringing almost all meals into the home.  While the growth of take-home grocery sales is strong, the overall picture for some supermarkets will be less positive as these gains are offset by falling spend on on-the-go meals, drinks and snacks. 

“As lockdown continues, households with more mouths to feed at home have made their way through supplies and are now starting to top up depleted store cupboards.  In accordance with government guidelines, we’ve seen shoppers limiting their time spent out of home by making fewer, larger trips at local stores, visiting grocers two times less than this time last year over the 12 weeks.  Families with children under 16 pushed up their spend by 30% on average.”  

Fastest-growing retailer SuperValu claimed the largest market share for the second month in a row and saw sales rise by 32.7%.  SuperValu’s locally-focused store estate helped it to benefit from people shopping closer to home and it welcomed 64,000 additional shoppers through its doors this period. 

Tesco also recorded formidable sales growth this month.  Its typically larger stores allowed it to capitalise on the increase in trolley shops and the grocer grew by 23.7% to hold 21.8% of the market.

Dunnes also gained from shoppers spending more in store, spending an extra €10.39 per trip compared with last year, and it recorded healthy growth of 18.0%.  This was slightly behind the market, linked partly to Dunne’s not having a direct online grocery offer. 

Lidl benefited from its Dublin stronghold to boost sales by 30.5% and held its market share at 12.0%, while Aldi performed strongest in the south of the country, growing overall sales by 20.8% to hold an 11.7% share.  

Lockdown has continued to drive up online grocery shopping – and sales through digital platforms increased by 76% year on year.  Emer Healy continues: “Demand for online groceries has soared over the past few months and 15% of Irish households received at least one online delivery over the latest 12 weeks – a significant increase from 9% last year.  This sudden surge in demand meant that the retailers had to act quickly to increase their online capacity, and have been rightly praised for extending their services to those who need them most.  That includes reaching groups who are more vulnerable in the current crisis, with an additional 26,000 retired households ordering an online delivery over the 12 weeks to 17 May and over 65s spending an extra €8.9 million online.” 

Shoppers aren’t limiting themselves to food and drink essentials and it seems that some are preparing to look their best as lockdown eases.  Emer Healy continues: “With hair salons closed, shoppers took matters into their own hands and sales of haircare products and hair colourants were up 25% and 73% as they prepared to see friends and family in phase two of the lockdown following the loosening of restrictions on 18 May.”

Despite the circumstances, people have sought to buoy spirits and enjoy themselves in the sunny spring weather.  “Friday 1 May, the day before the early May bank holiday weekend, was worth €52.8 million as consumers prepared for a weekend of sunshine.  The holiday, coupled with a month of warm temperatures, meant that alcohol sales grew by a staggering 93% over the latest four weeks.  It seems many of us enjoyed the barbecue weather as shoppers spent an additional €3.8 million on sausages and burgers.  Ice cream sales were worth an extra €5.9 million.”

• >6million new video streaming subscriptions were purchased across the UK. 21% of British households purchased a new video subscription as they sought new entertainment options during the COVID19 lockdown period, taking the average number of subscriptions to 2.3 per household
• 56% of UK households have at least one Subscription Video on Demand (SVoD) subscription
• 52% of new subscriptions were for Disney+, despite the service only launching 24^th March
• Almost half of all Disney+ subscribers signed up for an annual subscription, demonstrating the effectiveness of the £49.99 pre-order offer.
• Tiger King beat the Mandalorian as the most cited content enjoyed, even amongst Disney+ subscribers
• Access to back catalogues proved a key differentiator, creating challenges for those brands without wide ranging content
• Netflix dominated in customer advocacy, with a Net Promoter Score of +46, far higher than its competitive set

While Netflix continues as the most popular streaming service, findings show that Disney+ is the rising star of Subscription Video on Demand (SVoD). Despite only launching in the UK in March, over half of new subscriptions in the past three months have been for its service. 55% of new Disney+ subscribers were stacked, meaning they already held at last one other SVoD service.

By contrast Netflix is the top driver of category growth, with 44% of its new subscribers accessing SVoD for the first time. The service also has the highest level of customer satisfaction in terms of the variety of TV shows it offers, the amount of original content and ease of use. All three of the most recommended series over the last three months – Tiger King, Ozark and Stranger Things – are Netflix exclusive. Original content and an extensive back catalogue has also driven significant growth for Disney+; 40% of subscribers cite The Mandalorian as their reason for joining the service.

Dominic Sunnebo, Senior Vice President at Kantar, Worldpanel Division, comments “As more UK consumers turn to subscription-funded streaming for their entertainment needs, it’s clear they want a wide range of content, with Netflix and Disney+ the clear winners. With over half of SVoD subscribers happy with the value for money subscriptions offer, this move towards stacked services is likely to continue.”

With the average SVoD household in the UK subscribing to 2.3 services, (compared to 3.1 in the USA) there is still room for growth. 44% of UK households do not yet have any SVoD service, Disney’s pre-launch which offered an annual subscription for a reduced £49.99, generated almost half of its total subscriptions today. One note of caution though is that 2.1 million housholds with multiple subscirptions plan to cancel at least one in the next three months.

Sunnebo continues: “COVID-19 has no doubt driven the short term-gains for subscription services, but with so many planning to cut their subscriptions in the coming months SVoD brands need to adopt new marketing strategies to stem the flow. Disney’s pre-launch special was a perfect example of how successful this can be, with almost half of its customers signing up to its annual subscription offer.”

Based on a longitudinal panel of 15,000 consumers and boosted by 2,500 new subscriber interviews each quarter, the service is designed to help the broadcast industry and investors understand the full consumer journey for digital video subscription services. The UK launch of Entertainment on Demand follows the U.S. launch in March, which highlighted the intensity of competition within video on demand streaming.Additional findings from the research reveal:

• AppleTV+ sees high levels of engagement across Smartphone and Tablet, but lower than competition on TV – this highlights Apple’s focus and challenge on driving Apple TV hardware sales to enable viewership
• Amazon Prime Video subscribers are impressed with its variety of TV series and ease of use, but are less content with the lack of new release films available. .
• Smart TV purchases were a primary trigger for 1 in 5 new SVoD subscriptions
• Customer advocacy and satisfaction increases across all platforms over time, meaning the onboarding experience is crucial to ensure long term retention

Kantar Entertainment On-Demand is delivered by the same team that provides the world’s leading mobile phone manufacturers with global mobile phone purchasing and usage trends. Kantar is the industry standard for TV viewing habits in more than 60 countries around the world, as well as being the leading global source of ad spend. This new service expands our expertise in to the subscription market and will help, major players, market entrants and investors understand the ‘why’ behind the ‘buy’ decision subscribers are making. Entertainment On-Demand is the only subscription service providing both quarterly installed base and new subscription market share alongside deep analysis on purchase motivations, including named content, customer experience, and diagnostics on ‘at-risk subscribers’ as well as guidance on acquisition and retention strategies.

Fraser McKevitt, head of retail and consumer insight at Kantar, comments: “The most recent three-month period now includes both the pre-lockdown rush to the shops in March, and eight weeks of stay-at-home advice from Government – a combination which has resulted in the fastest growth in take-home grocery sales for over 25 years.  While these are bumper figures, it remains true that the overall picture for some grocers will be less positive, as supermarkets continue to feel the impact of a considerable reduction in on-the-go spend on meals, drinks and snacks.  Those categories usually add up to £1 billion* over the course of 12 weeks and they aren’t included in these numbers.”

In the latest four weeks to 17 May, take-home grocery sales growth accelerated to 17.2% year on year as the Government announced the first stage of easing lockdown restrictions.  Fraser McKevitt comments: “In the most recent four weeks, the trend towards fewer, larger shops that we saw in April broadly continued.  Shoppers visited the supermarket 3.5 times per week on average, meaning 100 million fewer trips overall than the same month last year, and increased their spend each trip to £27.41 – nearly 50% more than they did during normal times.  

“People have been working their way through their store cupboards over the past couple of months and some will now be spending a bit more on each visit to the supermarket to replenish supplies.  The greatest rise in spending has been among families with children over the age of 16 living at home, reaching £618 on average this month compared with £545 last May, as they continue to cater for more people living under one roof and compensate for meals not eaten at work, school or college, or while socialising with friends”.   

Some of this spend has been directed online, and shoppers trying to make use of delivery services when they can have increased digital sales by 75%.   Fraser McKevitt comments: “Online shopping now accounts for 11.5% of all grocery sales, gaining more ground and attracting more new shoppers in 2020 than the channel has in the previous five years.  The retailers have done a brilliant job of reacting to a sudden spike in demand by increasing their online capacity, and it’s meant that nearly one in five British households ordered groceries online in the most recent four weeks, 1.6 million more than this time last year.  And it’s not just groceries experiencing a boom – people missing their favourite restaurants and wanting to treat themselves have pushed takeaway deliveries** up by 250% year-on-year.”

“While the gains made by online shopping are unlikely to be sustained at these levels, the crisis has certainly accelerated the move towards online.  The grocers have attracted a new group of customers, in particular older demographics, and we expect some of them may continue using online services and enjoying the convenience that home delivery provides."

Consumers are taking their first tentative steps out of the full lockdown and the number of people visiting bricks-and-mortar shops began to increase ever so slightly in the week leading up to 17 May, following the relaxation of some measures by Government on the previous Sunday.  Shoppers made the most of parks and warm weather to enjoy picnics with their households and socially distanced catch ups with one other person, helping to boost sales of chilled dips by 22%, crisps by 28% and carbonated soft drinks by 25%, during the course of the four weeks.

Thursday 7 May, the day before the Friday Bank Holiday to mark 75 years since VE Day, was the biggest shopping day of the month and £488 million was spent on take-home groceries.  With pubs and restaurants still closed, people made the most of the sunshine at home and sales of frozen confectionery and alcohol were 40% and 50% higher than last year respectively.  Barbecue weather for many may have encouraged shoppers to spend £17 million more on burgers and £24 million more on sausages year on year.

Looking ahead, Fraser McKevitt comments: “Shoppers and retailers are now thinking about what the impact of a less restrictive lockdown will be, and a phased re-opening of non-essential retail and the out-of-home food and drink sector will have a significant impact on grocery sales in the coming months.  However, with plans for reopening the hospitality sector still uncertain, we are currently projecting that extra meals, snacks and drinks consumed at home will mean take-home sales at the grocers could be up 12% over the course of 2020 as a whole.”

An update on the grocers

All ten major supermarkets and the combined group of independent retailers increased sales in the 12 weeks to 17 May.  However, some of these gains will have been offset by a decline in ‘on-the-go’ purchasing, including breakfasts, lunches and snacks as well as any sales to businesses or schools.

Online specialist Ocado saw sales rise by 32.5%, with its market share increasing to a new high of 1.6%, up from 1.3% last year.

Shoppers staying closer to home and avoiding queues at large supermarkets benefited both Co-op, up by 30.8%, and independent retailers, up by 63.1%.  Co-op reached 7.0% market share, a level last achieved in 2011, while the 2.5% of sales taken by independent grocers was last seen in 2009.

Iceland climbed to a 2.4% share of the market, a proportion of sales it last held in 2000, as sales increased by 28.6% over the 12 weeks.  Meanwhile, sales at Tesco rose by 12.7%, Sainsbury’s by 12.5%, Asda by 6.5% and Morrisons by 9.8%.  Lidl, Aldi and Waitrose saw sales rise by 16.5%, 10.4% and 12.5% respectively.

*Kantar’s ‘Out of home’ panel records food and non-alcoholic drink purchasing, wherever it is bought and consumed, that is not part of a take-home grocery shop.  Data is collected from a panel of 7,500 consumers who record purchasing via a mobile app.  The on-the-go sales referenced here is purchasing at Grocers only. 

**Kantar’s ‘Out of home’ panel also covers takeaways and deliveries. The data referenced here on deliveries refers to the 4 weeks to 19 April 2020.

• Korea: How did shoppers/consumers behave during the Swine Flu and MERs outbreaks, and how does it differ to the response to COVID-19?
• Taiwan: With Taiwan being an ‘exemplary’ country in tackling COVID-19, how did FMCG fair?
• The role of promotion for categories on the path to recovery in China. Be reminded on assessing the right depth, frequency, and lever!
• Ecommerce versus bricks-and-mortar channels in lockdown – who is winning in the longer run in Indonesia?
• Our Beauty panel in China: With personal care being one of the more severely impacted categories, how is it recovering post lockdown? 

• Ecommerce is on the rise... but it was actually growing more before COVID-19 in Brazil and in Chile
• Pharmacies in the region have seen a 55% growth in shoppers, as people look to emerging retail channels to meet their needs
• 24% of people in Latam claim to have shopped for food in a different way since the beginning of the outbreak, such as WhatsApp or delivery apps
• Peru in particular has seen a massive rise in TV watching, as audiences increase across a locked down world.

What does it mean for your brand or category? Download the ten slides, and get in touch with your queries.

Cliona Lynch, consumer insight director, Kantar, Ireland, summarises some of the key findings from our most recent webinar: "Adapting to the new normal: Insights into Irish Grocery Shoppers in Lockdown."

€196m additional take-home spend

With the Irish population on lockdown for the entire month of April, it's clear from the latest data from our grocery panel that shoppers compensated for a lack of out of home options by increasing spend on take home grocery by 23%, spending an additional €196m. Shoppers also added 92 million more packs to their baskets in the four weeks to 19 April, up 19% year on year.

Missing the cinema? You're not the only one; Irish shoppers looking to recreate the experience of going to see a film in their homes boosted popcorn sales which were up 63% in April.  And with no more lunch on the go, brunches out, coffee and cake dates or dinners in town, shoppers added new categories to their repertoire to replicate those occasions as best they could at home. Sales of brunch favourites - bacon and eggs - were up 33% as we take more time over breakfast. BBQ meats grew by 44% bolstered by some very welcome sunshine which saw those with outdoor space taking the opportunity to enjoy it. We're also using the extra time at home to bake - with home baking ingredients growing 52% (sourdough anyone?), and to try out more adventurous recipes for dinner with ethnic ingredients growing 41%.

While March was about stocking up on non-perishables; pasta, canned goods, healthcare and cleaning products, April was more about nesting – trying out new meal ideas, baking and enjoying a drink at home. These are all ways to compensate for missing our usual meals out, treats and pub drinks as we tried to keep spirits up and palates happy in our households.

Locked down and limiting our risks

Whether it was the risk of contact points in the supermarket, the fear of explaining yourself at a Garda checkpoint or the hassle of queuing, shoppers in Ireland adapted their behaviour in April to make less trips to stores, and to stock up when they were there. We have even seen shoppers reduce the number of stores they will visit – down from three stores a week at Christmas to a record low of 2.4 stores in the week to 19 April. Range and availability has therefore never been more important; shoppers want to get everything they need in one shop, and avoid another “unnecessary” journey.

Many shoppers also switched from a Friday or Saturday shop to a Tuesday or Wednesday outing – in part to avoid crowds, and in part due to having freer weekdays, with schools and colleges shut and some 600,000 Irish people becoming unemployed. While Tuesday and Wednesday saw the strongest growth, Sunday remains the quietest day of the week for stores, with just 8% of weekly grocery sales coming through that day.

Staying local

The government-set exercise area limit of 2km seems to have been extended by shoppers to their grocery trips. There is evidence that they have been staying as local as possible when it comes to store choice. Those stores with the biggest networks – SuperValu, Centra and SPAR have benefitted from this trend – winning new shoppers and growing sales faster than competitors.

An extensive store network was one of the key factors behind SuperValu taking back the top spot in the Irish grocery market – a title they last held in April 2018. SuperValu saw 45,000 new shoppers in-store in April, and was the only retailer to grow shopper numbers in a month where we shopped around less and visited fewer stores. The retailer also benefitted from very strong growth of sales through its online platform.

The growth of online shopping was driven in part by over 70s being restricted from visiting stores in person. The number of retired households shopping online doubled in April and their online spend online increased by 157%. These shoppers benefitted from dedicated delivery slots, options to call in orders and a push to increase capacity, as the industry flexed its services to help protect those most vulnerable. However, online grocery deliveries did not fully replace their usual shopping habits and cocooning meant that retired households were the only demographic to reduce spend overall on grocery in April.

Socially distant Easter

Keeping apart from our friends and family certainly impacted Easter. As Leo Varadkar pointed out, Easter Egg deliveries to nieces, nephews and grandchildren were hampered. And while hopefully everyone still had a visit from the Easter Bunny, perhaps there were fewer eggs delivered than previous years – as eggs and novelties represented 59% of confectionery sales this year compared with 68% last Easter.

And while many families will still have enjoyed their Sunday Roast – they might have had a few less seats around the table as extended family and young adults stayed away. As a result we saw no repeat of the traditional Easter boost for fresh meat and veg. Instead we saw shoppers reach for Crisps, Snacks, Chocolate, Baking ingredients and Alcohol – as people comforted themselves for missing out on their usual gatherings with family and friends.

What next?

We identified five major themes in our grocery shopping behaviour for April – and only one of these do we expect to extend beyond lockdown:

1.  Fewer, bigger trips
   • Shoppers are making fewer but bigger trips as they limit their store visits and buy across more categories on each trip
   • Will continue through lockdown but unlikely to continue beyond
2. Location and social distancing
   • Online and Symbols increase their share to 8.5% as they offer convenience and reduce risk
   • Will continue through lockdown but unlikely to continue beyond
3. Experience beats convenience
   • As shoppers spend more time at home, creating in home experiences becomes a top priority
   • Will continue through lockdown and may continue beyond
4. Younger, larger households
   • Larger households drive growth with more mouths to feed while retired shoppers abide by government restrictions
   • May continue through lockdown but unlikely to continue beyond
5. More snacking occasions
   • A break in routine causes more snacking occasions as health takes a back seat to taste and comfort
   • Will continue through lockdown but unlikely to continue beyond

Insights in this piece are based on the four weeks to 19 April 2020. If you’d like to find out more, please do get in touch. You can also watch the webinar again on demand.

The annual ranking, which focuses on the long term performance of brands, includes a special analysis on how the biggest brands are faring during the current pandemic, with early signs showing that they are winning in relative terms.

Key findings include:

A shift in favour to the top 25 global FMCG brands

• 424 billion brand choices were made throughout the year, representing a 2.6% increase in CRPs (Consumer Reach Points) compared to 2018.
• Global brands grew CRPs by 2% in 2019 compared to zero% growth in 2018, but this wasn’t enough to beat out local brands which grew CRPs by 3.1% around the world.
• Global brands now account for one in three (34.1%) brand choices around the world, while local/regional brands account for two in three (65.9%) of the brands placed in shopping baskets.
• The biggest global brands responded best to the challenge posed by local brands in the past few years, showing their most successful growth rate than in any previous Brand Footprint. 20 of the top 25 (80%) ranked brands achieved growth in 2019, compared to 48% in 2018.
• The top 50 Global brands accounted for 15.5% of all brand choices made in 2019 and accounted for 24% of the growth in items purchased.
• Three top 50 brands (Pond’s, Vim and Brooke Bond) achieved a global penetration gain of 1% or more – meaning an additional 14 million new customers each. Every 0.1% penetration gain globally is an extra 1.4m shoppers.

Top 10 most chosen brands globally 

Source: Kantar’s Brand Footprint report 

More brands than ever chosen over 1 billion times

• There are now 40 brands around the world that are placed in consumers’ shopping baskets more than one billion times per year. In addition to the 22 Global ‘billionaire brands’, the number of local billionaire brands has grown from 14 to 18. All 18 are either Indian or Chinese.
• Five global brands joined the billionaires club: Brooke Bond, Head & Shoulders, Kinder, Heinz and Oreo.
• Coca-Cola remains the world’s most chosen brand on the planet, picked from the shelves over 6bn times during the year; followed by Colgate in second place (chosen 4bn times) and Maggi in third (3bn times).

India a key lever of growth

• In the latest ranking India was the country that contributed the most growth for 13 of the top 25 ranked brands. This compares to 8 of the top 25 in 2018, demonstrating the nation’s increasing importance to brand success.
• The unique shopping habits of Indian consumers become more evident in 2019, with FMCG brands being bought more often across the country and in smaller quantities.
• Homegrown brands like Patanjali and Dabur increased their nationwide penetration in 2019, challenging the dominance and growth of leading market players and underlining the global popularity of natural and ayurvedic beauty products

Sector winners and losers

• Across all FMCG sectors competition got tougher. Overall just 46% of brands achieved CRP growth in 2019 compared to 47% of brands in 2018, 49% in 2017 and 52% in 2016.
• CRPs in the dairy sector grew by 0.7%, with global brands losing market share to local brands for the second successive year.
• The food sector grew by 2.7% during the year while market share between global brands and local brands remained unchanged at 27.6%/72.4%.
• In the Beverage sector growth by global brands outperformed growth by local brands. As a result global players increased their market share to 38.4%
• Coca-Cola gained momentum for the first time since 2013, now picked from the shelves over 6.0 bn times in a year, with a much-improved performance.
• The health and beauty sector was the fastest growing category by CRP growth with an increase of 6.1%. Local brands benefited slightly more from the growth compared to global brands. Global brands now account for 59.6% of brand choices down 0.6% vs 2018, a second successive loss of share. 

 

Find out more

To learn more about Kantar’s Brand Footprint, explore the data and request more information, please visit www.kantar.com/brandfootprint.

Watch the webinar here.

 

 

Notes for editors

About Kantar Brand Footprint: Kantar’s annual Brand Footprint study is based on research from 74% of the global population; a total of one billion households in 52 countries across five continents—covering 85% of the global GDP. As part of the study, Worldpanel tracks more than 22,900 brands across beverages, food, dairy, health and beauty and homecare.

The good news is that the battle against COVID-19 in Vietnam has eased up, but it is not over yet. As its final impact on the economy and businesses is difficult to predict entirely, the expectation is that the country will face challenges at least until July. As a result, Vietnam’s full-year GDP growth is forecast to be about 5%, which is lower than expected.

Similar to the experience in China, the COVID-19 crisis will likely pivot through different phases as the situation develops. It’s important to understand the impact through each phase in order to respond, prepare, and predict the future.

The following analysis focuses on the first eight weeks of the pandemic, ending 22nd March which is before the national social distancing order became effective on 1 April, which is defined as the ‘pre-lockdown period’.

Behavioural changes potentially shape new habits

At the first stage of pre-lockdown, Vietnamese consumers cut down spend in some areas such as out of home activities and luxury items. They shifted their focus to staple needs including fresh food and essential packaged consumer goods to survive during the self-isolation time. Consumer spend on FMCG picked up strongly in the first quarter of 2020, hitting double-digit growth. The abnormal spike was over the first eight weeks of COVID-19, especially in big cities. This indicates some degree of stock-up behaviour among Vietnamese consumers as social distancing was enforced to avoid exposure. While it may not be the same for all categories in FMCG, we expect the market to return to its “single-digit growth” when the pandemic is over.

[COVID impact*: The first eight weeks of COVID-19 – 8 weeks ending 22nd March 2020 compared to an equivalent period of eight weeks last year – eight weeks ending 31 March 2019]

Changes in shopping behaviour differ by region. Due to the availability of big retail formats, urban consumers made bigger shopping trips with more items to limit travel and contact. In rural areas, where traditional channels remain key, consumers made more trips.

Moving towards the second stage, national lockdown will likely result in the further reduction of shopping frequency given restrictive shopping and transportation, while the basket size might significantly increase.

Consumers focused on four key buckets of categories at this time showing an increased preference for essentials, convenience foods, health-boosting and hygiene products. Besides health and hygiene products, the upsurge of cooking aids, snacks and meal replacements are demonstrating new habits potentially formed as a result of more time spent indoors. The lockdown period, which means more time at home, will probably generate new routines and choices which will influence future demand. It will be interesting to understand how consumers feel about these changes in order to assess the potential impact in the coming months, for example whether these increases are purchases brought forward, or if there will be increases in consumption in the long term.

Noticeably, some areas of beauty care, particularly the skincare segment, have sustained growth thanks to flexitime under the “stay home” campaigns. This trend is the opposite to what happened in developed countries like China and European markets where there are fewer personal care occasions because of working from home. It could be explained by the fact that makeup is still underdeveloped in Vietnam with its immature reach of just a quarter of urban housewives. Hence, there is a small difference between usage whether people stay at home or go out to work. Yet, in the following phase of COVID-19, we may expect some impact on the beauty sector due to store closures and more limited product availability, as the country moves to quarantine and lockdown mode.

Beverages continued to struggle in March. Enjoyment drinks and sugary drinks are the most heavily affected categories amid the pandemic, such as beer, carbonated soft drinks and ready-to-drink tea. However, we start to see several actions taken from brands in order to recover. Embracing digital seems the most relevant and common way to deal with the situation. In China one-third of consumers used delivery/O2O (online to offline) services to order milk or herbal tea online during the month after the COVID-19 outbreak. Moving to online and offering doorstep delivery could be one step to turn things around or at least to help minimize the loss.

Channel dynamics to rethink retail strategy

With the concern of infection, we have seen an impact on the way people shop. Interestingly, all channels have been achieving double-digit growth, which has never been seen over the past seven years. It implies that the omnichannel shopping trend is stronger during the pandemic. Different channels serve different consumer needs. To stock-up, consumers go shopping at the hypermarket or supermarket and emerging channels such as online while they use the minimarket more frequently and buy more in traditional channels like street shops and wet markets.

Big modern formats (including hypermarkets, supermarkets and even cash & carry) and emerging formats have outpaced traditional trade during this uncertain time. In the context of COVID-19, listing a wide variety of categories, brands and pack sizes can help to attract shoppers to the store, as they are confident that they can get everything they need, especially fresh food. This is a key advantage of big retail formats, in turn driving the increase in footfall. Consumers currently visit hypermarkets and supermarkets more often than ever before, with a purchase on average made every 10 days to the four weeks ending 22nd March. COVID-19 has pushed Vietnamese people to try new things. There are a significant number of consumers who haven’t shopped FMCG products online or at minimarkets before, now starting to make their first transactions. Consequently, both online shopping and the minimart format reached a peak in terms of shopper base versus any historical four-week period. Though these channels had already shown good progress in Vietnam over recent years, it presents a chance for them to further expand if new shoppers enjoyed their experience. Understanding this and working to remove other existing barriers will be key for the continued development of these emerging channels after the crisis.

Big C, Bach Hoa Xanh and Mega Market are physical retailers managing to achieve an impressive surge during pre-lockdown. In terms of online shopping, incremental FMCG transactions came from both social commerce and ecommerce. Facebook - the most popular social media platform - remains the most chosen platform for online FMCG purchases, followed by Shopee - the pure ecommerce player. Both of them recorded triple-digit growth.

While some of these changes and winners may be short-term, there will be many hoping to extend this opportunity into the long term, pointing to how we may behave in the next phases of COVID-19. The implications for FMCG players will be to re-think and develop growth strategies and partnerships with the key retailers in order to win the “new normal”.

Contact us or get in touch with your usual contacts at Kantar to discuss what we can support you to navigate the uncertainty.

The initial FMCG impact of the pandemic manifested itself as an increase in spend of 20%, an additional €48 per household during P3 2020 vs P3 2019. This was driven by four main factors. Panic buying during the first weeks of lockdown was driven by a fear of shops running out of stock, and accounts for the behaviour of 29% of the households. The closure of restaurants and bars meant that there was a 25% increase in consumption opportunities in the home as people had to fulfill all their eating occasions without leaving the house. In addition, there were new consumption occasions: 31% more snacks and 51% more aperitifs were consumed at home. The lockdown also brought about some changes in habits as people found themselves with more time in the house, 6% spent longer on preparing and cooking food.

However, not all French people reacted to the lockdown in the same way. The small, middle-aged households of the Paris regions prepared the most for lockdown. They were more anxious and also, due to living in apartments and eating out of the home a lot, they weren’t used to keeping much food in stock. In terms of categories, there is a clear drive to return to basics, for example long-life and homemade products. There is also a focus on hygiene in the home to fight the virus and also some comfort eating for example snacks and aperitifs. Some non-food markets are also affected. Working from home has a significant impact on people’s personal care routines with 20% no longer wearing make-up. In general, there is less attention on personal appearance: only 10% continued to buy clothing online or in hypermarkets/supermarkets, while 46% dress casually with 12% staying in their pyjamas all day.

Less is better, paused

Buying less, but buying better, has been a key trend across France in recent times. In the current environment though, this has been put on pause as the increase in food budget is really about buying more per trip.

The current economic environment has led to an increase in unemployment of 7% and a reduction in GDP of 3% for every month of lockdown. As 15% of households are now struggling to pay for their groceries, people prefer to save money. This is shown in the fact that 86% of French households are currently only buying what they need, avoiding the superfluous. Linked to this is a growing perception of an increase in food prices, currently 74% of households think that prices have increased, this contrasts with 44% in the second week of the lockdown in late March. One of the impacts of this is that private labels are growing, up 1.2% in P3 2020 compared to the year before. The converse of this is that brands are facing less loyalty from their buyers.

The perception that prices are rising is actually a reflection of several different things that are happening in the market at the moment, for example, there are currently 1.9% fewer promotions. The product mix is changing too as people shop more locally: 85% favour items made in France and visits to convenience stores are up 1.7%. In addition, as some items go out of stock, they are being replenished with more expensive versions which means that some of the necessity products are actually increasing in price by around 2.5%.

Change in key trends

Of the key consumer trends observed in 2019, some seem to have been paused during the lockdown, while others are still as relevant as they were before. For example, focusing on a particular brand, and buying products for their green credentials appears to have been paused at the moment.

On the other hand, buying local is probably more important than it was before, and the natural trend which includes cooking from scratch as well as buying natural products appear to be in growth. A fifth trend is about responsible consumption and this appears to still be strong, particularly with regard to the societal focus. Kantar research shows that 87% of French people who were aware of initiatives by retailers and brands to fight the pandemic agreed that this was a good thing to do.

Growth of online

While the hypermarkets and discounters face declines of -2.3% and 0.6% respectively, there is growth for other retail formats including supermarkets +1.4%, convenience stores +0.3% and online +1.2%, during the lockdown.

Online has won a lot of new customers, 2.5 million so far, contributing 79% towards its growth. Of these, 30% who have tried online shopping plan to return.

Avoiding contact is a high expectation of French households in the current environment: 86% want to avoid touching products on the shelf and 88% tend to avoid shopping when they know there's going to be a lot of people. This means that new ways of shopping such as click and collect, shops without staff and artificial intelligence in store are increasingly attractive as are things like direct to consumer. The COVID-19 period is changing the buying patterns of consumers and means FMCG players need to respond with new capabilities and offers.

The future

There are some clear challenges ahead and much is still uncertain, but some of the key areas that FMCG players need to consider are:

• The digital era of food, as people favour zero contact services.
• A back to basics focus for consumers such as buying local, preferring homemade and a resurgence of DIY.
• CSR focuses more on societal issues than the environment, in the short term at least.
• Fragmentation of consumers between affordability “end of the month” and ethical “end of the world” concerns.

Get in touch with our experts if you would like to learn more on French FMCG trends.

• The impact of COVID-19 on brand choice
• 2019 in numbers
• The ranking of the Most Chosen Brands globally
• The success of bigger brands
• Success stories from global and local brands around the world

Sign up for the webinar on 20th May and get a closer view on growth opportunities for your brand in the FMCG market.

10 am (UK time)

4 pm (UK time)

Out of home to in-home

Before the COVID-19 outbreak, one in five beverages were consumed outside of the home. This means up to 123m occasions every day are now at risk given that up to 70% of Americans are under some form of lockdown.

And in fact, our latest data covering the last two weeks of March shows that the one in five beverages consumed out of home had shrunk to fewer than one in ten – even before widespread lockdowns came into effect at the end of that month. Those drinks brands which are most often consumed out of the home (energy, fruit and sport drinks, for example) need to understand how to position themselves for enjoyment at home – and fast.

That said, some products which are more reliant on in-home consumption will be more in demand as consumers are forced to stay home and cater for more meals themselves. During the SARS outbreak, consumption of dairy products in China increased by 3%, and we can expect similar upticks in staples like milk.

Quarantini time?

Of course, with bars and restaurants shuttered and social distancing guidance in place, there’s now limited opportunity for a drink with friends or colleagues. The potential impact of this is a reduction of 93m in weekly alcohol occasions. In our latest data we see that these shifted in home even more drastically as bars and restaurants closed before full lockdown measures kicked in.

The potential up-side for alcohol brands is that half of alcohol occasions are part of celebrating or relaxing with our partner – which we will expect to simply move back into the home. There could be opportunities for brands which give consumers a good reason to trade up to make their date night at home extra special.

Health kick or creature comforts?

Up to $1bn weekly “treat” occasions, previously enjoyed out of the home, are now open to beverages brands to play a role in bringing some joy to home-bound consumers. Ahead of quarantine measures coming into effect, it was unclear whether consumers would treat themselves to alleviate boredom, replicating what they’d usually consume out of home, or try to remain healthy during this time by seeking out healthier alternatives.

What we have seen in our latest data is actually a move toward healthier alternatives during the final two weeks of March, as Americans entered lockdown with the best of intentions. It’s crucial for beverage brands to understand how this holds up over time, as consumers settle in to their new way of life.

David Berry, managing director – Ireland at Kantar, explains: “It’s been a challenging few weeks and we’ve all been grateful for how hard the grocery retailers have been working to keep us fed and watered.  In the absence of dinners with friends and lunch on the go, many more meals are being eaten in the home and grocery sales have risen accordingly.  But social distancing means people are less likely to be buying categories like clothes, food on the go, and general merchandise – which means, for some retailers, the overall picture will be more modest.”

In the most recent four weeks, year-on-year grocery growth slowed slightly from March levels to 22.5% and, as people followed Government advice to stay at home, the average household visited the grocers 19 times, two times fewer than the same period last year.   

David Berry comments: “In an effort to get everything they need in one go and cater for all the additional meals and snacks eaten at home, shoppers are adding an extra four items to their baskets each visit, increasing their monthly grocery bill by €118 on average.  

“The change in shopper behaviour adds up to an extra €440 million spent on grocery in the past 12 weeks, but this additional spend is impacting individual retailers in different ways.  Before lockdown, Dunnes customers already spent 80% more than the average shopper each visit at €43.80, which means the retailer has experienced less of a jump in spend per trip than those grocers starting from a lower base.  Dunnes is growing slightly behind the rest of the market as a result, but these are extremely narrow margins and only 0.5 percentage points separates the three retailers at the top of the table.”

Lidl was the fastest growing of all the retailers during the full 12-week period, boosting sales by 22.1% and increasing its market share to 12% while Aldi grew by 15.6% to hold an 11.8% share. 

In the shorter term, SuperValu’s large store estate saw it benefit from shoppers choosing to visit outlets closer to home, and it was the only retailer not to experience reduced footfall during the past four weeks.  

Demand for online grocery has soared as people try to limit their contact with others and 10% of Irish households received an online grocery delivery in the past four weeks compared with 6% last year.  David Berry comments: “An additional €20.6 million was spent online this month and it’s heartening that the number of retired people getting groceries delivered has doubled in the past 12 weeks, indicating the take up of delivery slots among more vulnerable groups.”

Consumers are looking for ways to pass the time during lockdown and David Berry comments: “People are turning to cooking from scratch as a good way to keep their families entertained at home.  Sales of ready meals are in decline but 50% of Irish households bought baking supplies in the past four weeks, with flour up 52% and sugar up 43%.  Those shoppers trying to recreate their favourite takeaway dishes have also boosted sales of ethnic ingredients by 41% and herbs and spices by 61%. 

“There are signs that people are trying not to let the lockdown dampen their spirits.  While beer gardens and wine bars remain off limits, people have been turning to the grocers for their favourite tipples and boosted sales of alcohol by 70%, an additional €47 million.  Wine sales increased by 50% year on year, while beer, lager and cider sales benefited from the warmer weather and were double the levels in the same four weeks in 2019.”

This week we look at snacking and stocking up, and how these are being impacted by our behaviour in lockdown. We show that growth is not equal across demographics and how men increased their TV viewing in China during lockdown. We analyse consumer packaged goods (CPG) pricing and show what this looks like for all categories.

This week’s ten insights around purchase and consumption behaviour and COVID-19:

1. We start by looking at the latest reported daily deaths by country and region, and the models some countries are using to predict the next few weeks. We know that comparable and fair measurement is hard, whilst models are subjective. This is true for any data and any model – from understanding COVID-19 trajectories, to determining marketing effectiveness. You really need to know what is and isn’t being measured to be able to compare countries. Also, what assumptions are being used in a model.

2. We show four potential ways people can buy categories based on price, but these are all abnormal. The normal price distribution for all CPG categories is set by the brand leader and the competition works around it. You will see variation, but the general shape will remain constant. Price strategies will need to be adjusted but remember the lowest price is never the most popular.  

3. From Spain we look at the volume purchased in March for four different food categories and then the in-home consumption of these categories during the first three weeks of lockdown. We see a highly variable stock level hinting at a different post-COVID scenario, with only one of the four displaying consumption at the same rate as purchase. We recommend showing more ideas to consumers on how to use your category – creating higher consumption rate seems more important right now.

4. In the US there has been a reduction in spend of ~$400 per household per month, with a reduction across credit card and debit card spending as well as ATM withdrawals. As always there are winners and losers, with travel and restaurants down significantly whilst grocery is up. Everywhere in the world people are spending less money than normal despite the rising grocery food bill. But recessions don’t impact everyone equally. We will need to understand income levels and confident to be able to assess the nest way to market in the future. Some people will have extra money; many will be in trouble; most will be somewhere in between.

5. Next, we see how weekly in-home snacking occasions has changed week-by-week in lockdown in France, Spain and the UK. In the first week there was a slight increase between 5-10%, by week 5 this has risen to 50% as we have become accustomed to our new routines.

6. We predict potential retail channel shares based on different scenarios of when lockdown restrictions will be lifted by age, with online the potential big winners. Whatever the government decides on lifting the lockdown will have a big impact on the retail structure and growth rates.

7. In lockdown everyone is watching more TV (and spending more time on their phones and sleeping more) and based on data from China the viewing figures show a bigger increase amongst males, with the biggest growth during the middle of the day. Daytime TV is possibly the best way to reach male shoppers during lockdown. It is always interesting to look at one target group and males look like one group that are changing more than most.

8. In France, the CPG spend uplift in March was significant but not equally distributed. Whilst the amount spent increased across all age brackets, the middle age groups changed more than the eldest. The older you are the more you shop, so when it came to pantry loading, they struggled to shop more often and didn’t need as much as a younger household (with more children). This is always the case, when marketing works it attracts everyone… just to varying degrees.

9. With unparalleled changes seen in purchasing behaviour in March, it meant more brands won than normal. But this is unlikely to continue in lockdown. If a category is found in more shopping baskets, then more brands on average will be bought; this is what happened in March. But the lockdown means fewer overall grocery trips – making it more competitive. There are fewer opportunities for categories to be in baskets versus larger baskets containing more categories. Let’s see if new patterns emerge with less overall trips but more items in the basket.

10. Lastly, the latest from Google Trends. Some things you expect (Delivery replacing Restaurant), others less so – ‘Bleach’ was the highest search item this past week.

Although we’re still far from the pre-crisis average, this increase to nearly 70 million weekly purchases could be due to Easter week. With the closure of shops, even for just a few days, Spaniards stocked up on food, beverages and fresh produce.

Record numbers in the online channel

Online FMCG shopping reached a record high in the third week of lockdown. Despite the fact that the online channel has struggled to meet consumers’ growing demand, e-commerce continues to gain market share, now at nearly 3% share of the market.

The products most purchased via this channel are dry goods, beverages and household items, although this last group took up less space in online shopping baskets in the last week analysed.

As for the in-store channel, regional and local supermarkets, along with the DIA Group and Eroski, gave up some ground for the first time since the onset of the lockdown with the rebound of Mercadona.

Eating during the lockdown, from indulgence to healthy meals

As the lockdown wears on, the number of eating occasions at home has risen and indulgence foods have kept up a notable presence in Spaniards’ shopping baskets. However, in the week of 30th March to 5th April, products such as fresh tuna, honey and snacks have become more prominent. But staying at home has also led to a change in people’s relationship with cooking, as not only are they spending more time in the kitchen, they are also showing greater awareness around food and health. With the crisis, more than half of all Spaniards say they have tried to waste less food than before, while a third have shown interest in eating more healthily, discovering new recipes on the Internet and using more fresh produce.

This behavioural change is very interesting as on the one hand we are leaning towards indulgence and pleasure, while on the other, perhaps due to the lack of physical exercise, but especially because of all the free time we now have, we are opting for healthy food, more elaborate dishes and products that before would probably have expired in the refrigerator.

Our changing habits in cleaning and hygiene

Other consumer habits and behaviour that have most changed during this crisis are related to cleaning and hygiene. During the week of 30 March - 5 April, this category was marked by the widespread presence of home cleaning and disinfectant products, and although the list is still topped by rubber gloves, the presence of food storage products has grown due to the focus on not wasting food.

Home food delivery recovers after the downturn of the first weeks of lockdown

Despite the fact that many Spaniards have rediscovered their kitchens, during the second fortnight of confinement (30 March - 12 April), home food delivery shot up in Spanish homes, with a 10% growth in orders compared to the period prior to the coronavirus. Orders through the digital channel, via aggregator apps such as Deliveroo, JustEat, UberEats etc, have increased by 38% during the crisis, ahead of phone orders.

Fraser McKevitt, head of retail and consumer insight at Kantar, explains: “Grocery retailers and their staff have been rightly praised for keeping the nation fed and watered during the coronavirus pandemic. People are spending more time at home and eating fewer meals out of the house, which has led to a strong growth in take-home grocery sales. But social distancing also means that expenditure on other categories like clothes, food bought on the go and general merchandise will have been considerably lower, so for some retailers, the overall picture will be more modest.”

Year-on-year grocery market growth of 5.5% over the past four weeks is noticeably slower than the 20.6% recorded in March. Nevertheless, sales this month were still £524 million higher than they were in April 2019, a sizeable increase. The rise is primarily down to changing habits, as people adapt to a new way of living, for example the number of lunches eaten at home has nearly doubled under lockdown*. However, for the grocers the increased sales will have been partially offset by a fall in on-the-go food and drinks sales, which were worth more than £350 million in April last year**.

On average, households shopped only 14 times for groceries over the past month, a record low and down from 17 in more normal times. A drop in frequency was matched by a corresponding uplift in the amount spent on each trip to £26.02 – easily the highest figure ever recorded by Kantar and £7 greater than last year. Friday and Saturday remain the most popular days to go shopping, but only just. As social distancing measures disrupt the traditional working week, the proportion of trips made Monday to Thursday has increased, making it hard for shoppers to find quieter times to avoid others.

Shopper satisfaction*** with supermarket trips is beginning to grow and is now back at February levels, having fallen by 38% as the nation entered lockdown because of frustrations caused by busy stores and empty shelves. Most notably, public appreciation of staff working on shop floors and tills reached record levels this month, and is 13% higher than before the crisis started.

People heeding Government advice to stay home saw demand for online grocery shopping soar. Fraser McKevitt continues: “Retailers’ efforts to increase their online capacity are clearly working, with shopper numbers up by a quarter. Online sales now account for 10.2% of overall grocery, versus 7.4% last month, with the greatest increase among older shoppers. Although not traditionally big users of e-commerce, over-65s spent 94% more on deliveries than they did a year ago.”

Large format supermarkets continue to supply the majority of Britain’s food and drink, but convenience stores, whether independently owned or run by the major grocers, are thriving as people shop closer to home. Fraser McKevitt explains: “Convenience stores increased sales by 39% in the latest four weeks, now accounting for 16.3% of the market compared to 12.4% a year ago. It should be noted, however, that this rise may be offset by the downturn in on-the-go consumption, which will have had a disproportionate effect on convenience shops.”

Retailers were unable to rely on typical Easter and spring staples this year, instead adapting to changing shopper habits. Fraser McKevitt comments: “A look at different category data gives an insight into life under lockdown. Traditional Easter treats like Easter eggs and hot cross buns took a hit, as people couldn't celebrate the holiday with family and friends. Despite the sunny weather, sales of sun cream also fell with people unable to sunbathe in the park or plan a long weekend away. However, shoppers are finding new ways to enjoy themselves while staying home. Baking products continue to see strong growth, with sales of suet up by 115% and sugar by 46%. Over 40% of consumers say they are doing more home baking now****. Meanwhile alcohol sales also rose, as the nation replaced pub trips with virtual socialising.”

An update on the grocers

In the 12 weeks to 19 April, all ten major supermarkets increased take home sales as shoppers firstly stocked up in preparation for lockdown, then fell into their new routines. These increases will have been partly offset by the reduction in other sales, such as lunchtime and on-the-go snacking.

Co-op’s market share rose to 6.7%, up from 6.1% last year as sales grew by 20.0%. Independent and symbol retailers, such as Spar and Londis, also benefited from changing shopping patterns, with growth of 40.5%. Meanwhile online specialist Ocado grew by 19.4%.

Spending at Sainsbury’s was 8.4% higher than this time last year, and 7.2% higher at Tesco. Morrisons and Asda saw increases of 4.3% and 3.5% respectively. At Iceland sales rose by 16.6% and at Waitrose by 9.4%. Finally, Lidl sales increased by 14.8% and Aldi saw growth of 8.8%.

According to the latest official statistics, China's retail sales of consumer goods declined 19% year on year in the first quarter of this year. The food category dropped 7.7% as the confectionery and beverage sectors suffered substantial losses during Chinese New Year and the subsequent lockdown period. Against the backdrop of a declining FMCG market, the household products sector bucked the trend with a value increase of 7.4%. It’s worth noting that the total FMCG market began recovering seven weeks after new infection cases eased (w/c 13th March). Younger consumers, who were leading the market growth in the past years, as well as consumers from the western region were more resilient during this period. Further recovery is anticipated though the pattern of this recovery varies by sector.

Modern trade (including hypermarkets, supermarkets, and convenience stores) fell by 3.7% in the 12 weeks to 20 March compared with last year, among which supermarkets were the least affected by the COVID-19 outbreak, reporting only a slight decrease of 0.5%. Small/mini supermarkets saw robust growth of 13.5% as they are nearer to the homes of consumers needing to make a top-up of daily necessities. Hypermarkets struggled during Q1 experiencing a penetration loss of 3.7ppts versus the same period last year, as cautious shoppers tried to stay away from shopping malls and crowds.

Ecommerce on the other hand reported a stellar performance with a growth rate of 22%, despite challenges in logistics as a result of road shutdowns and shortages of both staff and supplies amid the coronavirus outbreak. Ecommerce now accounts for 19% of the total FMCG spend and is expected to continue to grow in 2020.

Mixed performance in Q1 amongst top players

Challenged by the unprecedented loss of physical shopper traffic during the past few months, modern trade retailers strived to utilise delivery services to supply fresh foods and groceries to meet the rising demand of self-isolation. Those who withstood the disruption of the coronavirus outbreak and even grew the number of shoppers were those who were able to offer fast and efficient delivery services.

Leading Grocery Share of Modern Trade - National Urban China 

 © 2020 CTR Market Research. Source: Kantar Worldpanel China

Amongst the top players, Sun Art maintained a steady position thanks to its strong integration with the Taoxianda platform under Alibaba. Over 2019, the Sun Art group accelerated its transformation of the traditional hypermarket format to make the stores smaller and digitally strong to meet shopper needs. RT-mart also actively leveraged community group purchasing apps as well as its own delivery platform “Youxian’ to maintain its service during Q1.

In contrast to the lukewarm performance of its peers, Yonghui maintained a staggering growth of 9.8% in the first quarter, driven by its strength in fresh foods supplies and recent expansion to smaller ‘mini’ formats to build advantage in proximity. At the same time, local giants such as Wumart and Bubugao continue to grow faster than total market, thanks to their well-managed supply capabilities and membership building as a result of regional focus. Regional retailers are also rapidly adopting livestream-based platforms to attract shoppers while consumers desire to shop in an interactive way.

Ecommerce and O2O

In the 12 weeks ending 20 March 2020, 62.6% of Chinese urban households bought FMCG online, up by 8.2ppt versus the same period last year. The consumption potential of lower-tier cities drove the growth of ecommerce, recording a 23.3% value growth with increasing purchase frequency.

In Q1 2020, both Alibaba and JD demonstrated a staggering momentum. Alibaba reached a significant uplift on penetration of 7.4ppts, accounting for 38.6% of the market. JD followed the growing trend with a penetration increase of 4.8ppts.

Despite the pandemic, ecommerce players continued launching grand shopping events, such as “Queen’s Day” (a transformation of international women’s day) this year, likely the largest one in the last four years. This year brands continued to establish a theme of empowering women, whilst further stimulating consumption by meeting the pampering moments of women, especially after this difficult time. For personal care manufacturers it becomes more crucial to understand how to embrace the new growth in the post COVID-19 era.

Meanwhile, as the demand for convenience and instant gratification surged, O2O players (including retailers’ own delivery platforms, JD Daojia, Hema App, Ele.me, etc.) managed to boom rapidly in first quarter. In the 12 weeks to 20 March, 35% of urban families in China purchased at least once food category via O2O platforms.

This analysis looks at the pre-lockdown phase from 19 -25 March, when our experts identified seven key macro findings from the data with regards to people’s levels of concerns. These impacts are felt to different degrees according to category and in our analysis we consider how this breaks down.

As over 60% of people have made four or more behavioural changes in this time, this is vital information for brands as at least some of these are likely to continue into the longer term. To find out more, download the free paper.

We believe behavioural evidence has a huge role to play to help us see what's happening clearly and to develop growth strategies and responses to them. We have focused on insights that truly reveal what happens to people’s FMCG purchase and consumption habits whilst staying at home, as a way to predict what consequences to expect in future behaviour.

This week we travel to Africa and Latin America to see how COVID-19 is impacting purchasing in these regions. We also build on last week's 'thinker', showing how promotions impact brand loyalty alongside channel hopping and look at how quickly home delivery is returning to normal in Spain.

This week’s ten insights around purchase and consumption behaviour and COVID-19:

1. How soon will it be before we start talking about traffic jams? Once restrictions are lifted and we start our morning commute again, quite quickly! At other times – weekends, mid-day – the roads could look like the way they do now for at least a month. Using TOMTOM traffic congestion data we have seen how traffic at weekends are still at lockdown levels in Beijing and Wuhan. Getting fully back to normal behaviours and talking about everyday problems is going to take time.

2. With 4.5 billion people globally impacted by restrictions, we are seeing more and more markets display a period of stockpiling, with the stockpiling effect even higher in Africa but happening later than other regions such as LATAM. With this stronger uplift, will that mean the African markets will face even stronger decline? One to watch.

3. An update of the China CPG spend growth shows that growth rate has not returned to the pre-COVID level, suggesting—like traffic congestion levels—that going back to how it was before straight away is unrealistic. And, more pessimistically, given the underlying trend, not for quite some time.

4. The significantly rising unemployment numbers across the world are making everyone nervous about the future. Based on current spend per household, if 16% of people move to the lowest income levels, UK CPG spend would decline by 3.5%. With CPG being essential for everyone and the spend difference between higher and lower income levels in developed countries not that great, this decline is not as large as other less essential sectors may see.

5. Famous brands are so successful because they attract any member of society. And, most importantly, they can do it while charging on average twice as much money as perfectly acceptable cheaper alternatives. We see here that Branded share of CPG spend never moves more than 1-2% from the average, whatever your income level. How brands continue to maintain high reach at these levels of premium in more uncertain times is what they will need to concentrate on.

6. We talked last week about how changing retail channel makes you less brand loyal. We’ve flipped it this week to show that again but also show how price promotions are, in fact, the great disruptors of loyal brand buying. The probability of changing brands from one purchase to the next is at 41% if you switch from offline to online, but this number jumps to 64% if the alternate brand is on promotion. But if you think this switch will stick, you should think again.

7. We look at the top line sales growth patterns of three categories from different sectors of CPG and the shapes are fascinating as they hide many usage behaviours underneath. We are seeing some people stockpile and then use faster than previously, versus others being more frugal than before. How you encourage more usage should be a high priority.

8. In France there has been a 50% increase in Apéritif at Home occasions and the accompanying food categories have benefited as a result. We suspect someone is working on the perfect drink or snack while on a video call as we speak. Are there other new eating occasions in isolation to exploit? Are there products you should associate your brand with more closely?

9. In lockdown we are all cooking more. But you need some breaks now and again! In Spain the number of food delivery occasions dropped by a third during the first two weeks of lockdown and by the third week had returned to previous levels. We think take-home delivery will continue to grow the longer we stay in lockdown. And lunch continues to be the occasion with the most potential.

10. We’ve named two brands of the week. The Rolling Stones for their involvement with One World: Together At Home, and Apple for their latest iPhone. How do 56-year-old brands last? Keep turning up where a lot of people might be watching. Play the same old stuff but highlight the parts that play well with the current context. You can get want you want: growth. And Apple: potentially getting ahead of the impending value market by launching high quality features at a lower than expected cost. Can you do that?

While the long-term impact of these measures remains uncertain, it’s more important than ever that brands keep up to speed with the current behavioural trends. This will inform scenario-planning and put them in the best position possible to mitigate the risk to their categories.

11 fewer personal care occasions

As Americans practice social distancing, the potential impact this could have on categories in personal care is all too clear. We know that consumers who work from home at least once a week have 11 fewer personal care occasions in the average week than those who don’t. When you extrapolate that across the cohort of people who are now working from home most (if not all) of the time – it’s easy to see how personal care categories could suffer.

Unsurprisingly, cosmetics will be the first category to be impacted now we are no longer expected to meet in person either for work, school or social events. Getting ready for work and school is the motivator for half of all of makeup occasions. While the use of video conferencing may provide a counterbalance to an extent, cosmetics usage is likely to suffer – by as much as 402 million fewer occasions a week- as working from home is adopted widely.

Quarantine beards

Similarly, while workplace facial hair guidelines may have largely fallen out of use, a quarter of men claim to shave for work and with the aim of looking professional. The lack of face to face meetings and office presence will therefore likely to affect shaving, reducing occasions by up to 79 million each week.

Another category which may see a sizeable impact is hair washing. #Nohairwash became a popular hashtag in China, where we saw frequency of hair washing decline during the country’s first lockdowns related to the virus**. In the US, women who work from home at least once a week have on average one fewer haircare occasion each week compared with those who don’t. We estimate 109 million hair washing occasions are therefore at risk every week as a result of widespread home working.

In addition, 75% of fragrance occasions are sparked by being out of home such as at work or socialising. We therefore expect use of perfume to decline during the epidemic as people are encouraged to stay home - potentially reducing by 181 million occasions.

What is the “new normal”?

As the pandemic evolves, Kantar’s personal care service gives an evidence-based picture of how our daily routines are changing over time and what implications this may have when we return to a “new-normal”. The key questions any brand or manufacturer needs to focus on now are:

• How has this disruption impacted behaviours in the category compared with before the crisis began?
• Where are the biggest threats in terms of lowered consumption of products?
• Where are the opportunities that we can tap into in a new ‘quarantine routine’?
• What will the ‘new normal’ look like and how should we prepare for when the period of isolation ends?

More than ever, we believe behavioural evidence has a greater role to play to help us see what's happening clearly and to develop growth strategies and responses to them. We have focused on insights that truly reveal what happens to people’s personal care, food and beverages routines whilst staying at home, as a way to predict what consequences to expect in future behaviour.

10 insights around purchase and consumption behaviour and COVID-19:

1. When would you loosen the lockdown? And how? Based on what we saw in China, for the most affected countries going back to ‘normal’ has some way to go. We are thinking slowly and with lots of measures in place going out to shop and eat freely is still some way off.
2. The impact in the UK has been a classic brought-forward sales path. What happens next will dictate whether grocery shops are going to win overall. We suspect it will be difficult given the amount of people with less income and the restrictive shopping rules in place.
3. How do price promotions work and what are their benefits? Can anyone remember? And does this change in lockdown, where demand still exceeds supply in certain categories? If we do see a reduction during lockdown – which logically we should – is it in fact time for famous brands especially to re-think their future promotional strategy as we recover?
4. For those wanting to grow it is about breaking habits. We know channel change is one of those times when more habits are broken. So, more marketing spend to focus on people moving towards ecommerce for the first time or returning should be a priority today.
5. Why is grocery ecommerce relatively low compared to non-consumer packaged goods? For many countries, it is the restrictions it imposes – a minimum size of basket plus limited delivery times. Of course, it will grow during the lockdown. But it will grow significantly faster in places where these restrictions have been minimised e.g. South Korea.
6. “We need to be more digital” will be the lesson many will take from this period. But even sectors like clothing, which have made it easy to shop and return goods, still can’t get over the fundamental problem: the majority still like to go into physical stores and shop!
7. The winning activities during the lockdown in China: sleep and entertainment (sitting down, no doubt). We believe this will be replicated in every country – home is where we all like to relax. When we do get back to normal, this is what we will miss the most, we suspect.
8. Our new routines are forming. We thought snacking would do better than this. What we are seeing is more meals (lunch and evening meals) especially increasing. This may develop as we move forward – in China in-home delivery recovered for example. This is one to watch.
9. We expect personal care occasions to be under pressure and it’s those which we do to make others and ourselves more confident which are the more likely to reduce. For example, deodorants are for when we are on the move and seeing people, not for when we sleep and watch TV at home!
10. Two older influencers to end this week: the Queen and Andrea Bocelli. Both offer us hope for a better future in their different ways. What was interesting is one used the classic traditional method (a TV broadcast) while the other newer one (a live stream) to reach massive audiences. Brands need to reach mass audiences as well – most will need to use both channels.

After the declaration of the state of emergency and its restrictions, people have been leaving their homes as little as possible and making fewer trips to the shops, but during these visits they are spending more compared to the previous week.

Over 65s, one of the most vulnerable groups, drastically reduced their purchases after the state of emergency was announced. Expenditure for this age group fell by 18% compared to the weekly average, which resulted in 11.2 million fewer trips across the whole of Spain. Following the trend of the previous week, young adults continued increasing their expenditure, although at a lower rate.

Record for the online channel in the first week of the lockdown

The lockdown has also led to a change in the channels where consumers do their shopping. In the week of 16-22 March, there was a shift to the online channel, which grew to a 2% market share, a record for the online purchase of mass consumer goods.

In line with the previous week, the Spanish shopped locally during the first week of lockdown, which was particularly beneficial to smaller supermarkets, netting a 28% share of the market. Regional supermarkets grew market share by 1.7 percentage points in a week, 3 points above their weekly average. Among the retailers, the big winner was the DIA Group which grew to 6.8% (+0.2 pp vs. the previous week). Meanwhile, the market share of superstores such as Carrefour and Alcampo has fallen due to the rise of local shops.

The fact that the Spanish have shopped more locally, where own label brands have a lower profile, has meant that the brands of the leading manufacturers have grown by 6%, a notable increase given that in previous weeks both producer and retailer brands were much more evenly matched.

New consumer habits during lockdown

During the quarantine, Spaniards have been changing what they eat and do at home. After the supply-based purchasing during the first few weeks of the Coronavirus crisis, the rates of purchase in the categories of non-perishable fresh produce, perfumery and hygiene, and baby products saw the greatest downturn. Fresh produce has returned to shopping baskets, bouncing back by 6% (48.6% vs. 42.6% the previous week), while the stockpiling of food and beverages has stabilised.

Although we note that the consumption occasions in the home are growing by 25%, this increase varies greatly by category. Spaniards have increased their consumption of pre-cooked meals and easy-to-make foods over that of rice and bean-based dishes, those they are still well-stocked with at home.

Within packaged foods, categories more closely related to baking, such as flour, butter, margarine, sugar and cream, have notched up the greatest growth, in line with new habits among Spaniards during the confinement, who say they are making more baked goods. These are followed by basic categories such as beans, conserves and rice. In the beverage category, beer has seen the highest growth (+23%), followed by high-alcohol content beverages (+17%).

By spending more time at home, in the case of baking, we seek out pleasure foods rather than healthy ones, and it’s one of the most popular activities to do as a family. In the case of alcohol, home is now the place to have our vermouth and a pint.

Being at home more has led to many getting down to some serious cleaning and tidying. In household goods, kitchen gloves and bleach are still the best-selling products, tripling and doubling their sales, respectively. In perfumery and hygiene, due to the new health recommendations, the sale of hand soap has doubled during the week analysed, and after the closure of hair salons, the purchase of hair colouring has also seen an increase (+8%). As for other cosmetics categories, such as fragrance and make-up, these took the greatest hits after the closure of perfume chains and changes routines since the quarantine.

Out-of-home consumption shrinks to 20% of its normal size

With Spaniards staying at home and restaurants closed to the public, out-of-home consumption has shrunk to 20% of its normal size, principally consisting of delivery services (which has retained two out of every three orders, particularly for food), and shops such as petrol stations, tobacconists and vending machines.

For the coming weeks, we estimate the rise in local purchasing will continue, and that consumers will gradually be shifting their increased expenditure from basic goods to complementary pleasure-oriented products.

Our smartphone OS data for the first quarter of 2020 shows that consumer behaviour has shifted significantly as a result of COVID-19, with people’s needs from technology changing rapidly to accommodate the new home-based reality many find themselves in. In Great Britain alone, video calling is +62% vs. the previous quarter, while purchases made via mobile phones have dropped 26%.

COVID-19 is dramatically impacting how consumers are using their smartphones. With so many countries around the world in lockdown situations, it’s perhaps not surprising to see such a significant increase in video calling as people seek to connect with each other for work and personal activities. The data also shows that consumers are increasingly looking for ways to entertain themselves, for example through mobile gaming (+24%) and watching short-form video content (+21%). There is, however, a demonstrable reduction in mobile phone usage to make shopping purchases and for navigation (-9%).

Smartphone sales have also been impacted by the crisis, though the global picture is not yet clear. While the iPhone 11 is the top selling model in Q120 across both EU5 and the US, and Samsung A series models continue to sell well across all markets, the COVID-19 crisis is having an effect. In China, where lockdowns came into place earlier, the data shows a significant hit to smartphone sales volumes.

If you are to look purely at smartphone brand trends, the impact of the COVID-19 crisis is not immediately apparent. Those trends that were in force previously still exist; Huawei continues to haemorrhage share in Europe, with Xiaomi picking up where Huawei left off. In fact, in first quarter, Xiaomi overtook Huawei for the first time, taking third place in across Europe with 15.4% share vs. Huawei (excl Honor) with 14.6%.

If we look to China, where the impact of COVID-19 was first felt and particularly in Wuhan province, we can see a dramatic impact. Q1 2020 smartphone sales in Wuhan fell by -55% vs. the same period 2019. The impact in Wuhan on sales was even greater in the month of February (-67%), with March data seeing a slight easing in the decline.

Samsung performance across Europe was fairly flat at 30.3% (-0.7%pts YoY), whilst in the US Samsung made significant share gains, hitting 30.5% (+3.7%pts YoY).

On the surface Samsung share gains in the US are impressive but look a little deeper and these gains are predominantly driven by low to mid-range A Series models, like the Galaxy A10(e), which are helping to drive overall volume, though are negatively impacting average selling price. The number of Premium handsets Samsung sells in the US has fallen from 45% of Samsung sales in Q1 2019 to 37% in Q1 2020. By contrast, Apple has risen from 69% to 71% over the same time period. The positive news for Samsung is that these lower ticket models are driving proportionally increased switching from Apple. The success of this strategy will be whether Samsung is then able to upgrade these consumers to more premium models in 2-3 years’ time.

The timing of Apple’s announcement of iPhone SE (2020) is well timed, given the financial impact COVID-19 is having on consumers around the world and the increasing traction Samsung is gaining with its revamped Galaxy A Series. Retailing at $399/£419 this new addition to Apple’s line up puts it in a strong position to weather the impact of the deteriorating economic picture and at the same time providing its existing customers with an affordable, smaller screen model to upgrade to.

Check out our data visualisation tool to view and analyse smartphone OS market share data online. The latest sales share figures for the major operators can be viewed and compared with historical figures here, and all graphics within the Kantar dataviz are available to embed in your site.

However, from the second week in March, FMCG sales returned to growth. Now that China has started returning to normal across most of the country, many FMCG manufacturers and retailers are keen to understand how long it will take for the FMCG market to fully recover and how they can help to accelerate this.

The speed of the recovery very much depends on the nature of the category and how impacted it was during the peak of the outbreak. Some categories will show a ‘V-shaped’ trajectory, where there is a quick recovery, whereas other categories will take longer and have more of a ‘U-shaped’ curve. Also, there are a handful of categories that were not negatively impacted, with some even experiencing stronger than expected growth during the epidemic.

Through analysis conducted by the Expert Solutions team at Kantar Worldpanel China, 98 FCMG categories were classified into one of four segments based on the performance they experienced both during the peak of the outbreak and whether they have experienced a fast or slow recovery during recent weeks as the COVID-19 situation improved. These are shown in the diagram above.

Growth categories: Increased or new demand generated as a result of COVID-19

The categories appearing here fall into two main groups. Unsurprisingly, one group consists of products which can kill germs and protect from the coronavirus such as hand wash, disinfectant and wipes. During the peak, disinfectant saw phenomenal weekly growth of over 600% and hand wash reported over 200% growth in some weeks during February.

The second group are products that can be used for home cooking such as bouillon, MSG, herbs and spices, and tomato ketchup. Also convenient in-home meals, such as instant noodles and quick soup, experienced growth, catering to consumers who might not be as willing or able to cook from scratch.

Categories falling into this segment have a real potential to leverage this unexpected growth momentum by ensuring consumers maintain the new habits they may have established during the epidemic. Sanitising and keeping yourself protected from viruses will undoubtedly be a much greater concern for shoppers in the future, so brands that have these benefits or have the potential to add them should put more focus and media investment here.

Cooking at home is likely to see a resurgence with many people learning to cook and improving their skills during the self-isolation. Also many families will feel safer preparing and cooking their own meals rather than ordering take-away or going to a restaurant where there is a higher perceived risk of infection. Consumers will be keen to continue these habits once the epidemic is over so for food brands it’s important to link the brand to in-home meal occasions, food safety and spending time with the family.

Limited impact categories: Essential categories that were unaffected by the outbreak

Categories falling into this segment include dog and cat food, toilet tissues, infant milk powder, packaged water and sanitary protection. These are categories that many households simply cannot live without, but you do not necessarily need to use more of during an epidemic. The panic buying behaviour of toilet paper that has recently been seen in some countries, such as Australia and the US, was not witnessed in China.

Another characteristic of the ‘limited impact’ categories is that they are more likely to be purchased online compared to the other segments. 25% of the spending on the ‘limited impact’ categories came from online versus just 19% for an average FMCG category. Online deliveries played an instrumental role in not only ensuring households received essential products during the epidemic but also meant people could safely self-isolate and not have to visit their local store.

Looking ahead to the rest of the year, a key consideration for these categories is how many consumers the online channel has won as a result of the outbreak. We know that this channel performed very well during the epidemic, winning new consumers and additional trips. Many consumers will continue this behaviour for these type of categories, so working with online retailers to ensure your brand can capture this increased demand will be critical to growth.

V-shape categories: Loss of consumption but quick to recover

Categories here experienced a significant drop in sales during the last week of January and first week of February but have been relatively quick to recover, with many returning to expected weekly growth rates within six weeks from the strongest decline. These categories include cooking oil, UHT milk, yoghurt, biscuits, nutritional supplements and laundry detergent. The reason these categories are likely to have experienced a sharp decline is either due to limited availability during the peak of the outbreak in shopper’s local stores or many households deemed them unessential for a week or two during the peak. Also, many shoppers will have had excess stock already resulting from bulk purchases made in the run up to CNY which is the trend often seen for categories such as cooking oil and biscuits.

However, these categories were quick to recover once shoppers felt it was safer to shop and/or the excess stock in their home had been used. One of the main concerns for these categories is that the lost or reduced consumption is unlikely to be compensated for later in the year. CNY is an incredibly important time for many FMCG categories and as a result of many households cancelling their family gatherings during this time, it meant this period of excess consumption simply did not happen and that extra stock in shoppers’ homes was consumed in the weeks after CNY. However, the fact that many of these categories have returned to their usual weekly growth levels shows that the demand is still there. Manufacturers will need to find ways to encourage additional usage occasions in-home to help compensate for the loss experienced during the peak of the outbreak. This can be done by capitalising on holidays later in the year, such as Golden Week in October or through multi-buy promotions, especially for those categories which are more expandable in their nature (i.e. if you encourage shoppers to buy more they will consume more, such as biscuits or soft drinks).

U-Shape Categories: Loss of consumption and yet to recover

These categories are ones that have experienced the worst impact as a result of the COVID-19 outbreak, as they suffered a significant decline during the peak (generally worse than the decline seen for V-Shape categories) and six weeks later they are yet to show signs of a full recovery. Categories here include skincare, make-up, shampoo, Chinese spirits, wine, beer, chocolate and candy.

Many personal care markets have been hit hard by the coronavirus as people had to self-isolate during the epidemic, reducing the demand for make-up and other beauty products. Many households self-isolated for almost two months and, with China only just now returning to normal, we are yet to see these markets recover. The reason for seeing alcohol and snacking products here is that people are more concerned with their health during the outbreak and want to keep their bodies fit and healthy in case they need to fight off infection. This coupled with the fact that many CNY celebrations were cancelled has meant a significant loss of consumption as well as the potential for lower future demand.

The key for brands operating in those categories is to ensure that they can capture demand by emphasising the benefits their brands can offer in the new era. Consumers will be more concerned with health but will also be looking to enjoy family occasions and social gatherings even more than before, given that they have been unable to do this for almost two months. Therefore capturing these moments of happiness and time together can benefit both snacking and alcohol brands. The perception of beauty will become more care driven than before, and products that stabilise skin conditions and provide extra nourishment will recover faster.

Conclusion

The path to recovery will be different for every brand as it depends on how their category has been impacted by the COVID-19 outbreak but also how consumers needs will change in the future. Below are areas that manufacturers will need to understand in order to find the fastest path to recovery:

• Demand Forecasting – understanding future demand post-COVID-19 and how to compensate for lost usage occasions.
• Marketing Growth Drivers – what elements of the marketing mix will help to drive sales after the epidemic: advertising, promotions, in-store activities and distribution are likely to have different levels of importance.
• Usage occasions – identifying new usage occasions that have arisen as a result of the coronavirus will be critical in helping to capture future demand and developing new products to meet these new needs.
• Media Investment – how to optimise your media investment will be more crucial than ever, especially in the event of reduced budgets. Knowing who to reach and how to reach them in the most cost-effective way will help to improve the return on investment.
• Channel Dynamics – online and O2O will be even more important channels post epidemic so understanding how people’s behaviour changes when shopping via these channels will help to identify new growth opportunities.

In the midst of the COVID-19 chaos, there has been plenty of speculation with regard to how consumers have changed their shopping behaviours. The attached special report focuses on the period pre-outbreak in South East Asia – the changes in shopper behaviour before the height of COVID-19 in these markets. We use real-time purchase data to debunk the myths supporting the speculations, and present the facts based on data and insights. These myths are:

Myth #1: Announcements of confirmed COVID-19 cases caused nationwide panic buying

Myth #2: Consumers who are panic buying are hoarding increased volumes

Myth #3: People are deserting offline channels and moving online

In addition to debunking the myths, the report provides our forecast on what to expect in the months ahead. The focus of the insights will surround countries in South East Asia (SEA).

Download the report now to understand:

• How are consumer/shopper behaviours changing?
• What is the ‘New Normal’ and how do I adapt to these fast-paced changes?
• How do I continue to thrive in the coming months?

More than ever, we believe behavioural evidence has a greater role to play to help us see what's happening clearly and to develop growth strategies and responses to them. We have focused on insights that truly reveal what happens to people’s personal care, food and beverages routines whilst staying at home, as a way to predict what consequences to expect in future behaviour.

10 insights around purchase and consumption behaviour and COVID-19:

1. Looking at daily data, one potential scenario is that the acute outbreak is over by July. This helps us frame the planning cycle: what should a retailer, category or brand stop, start, or continue doing, given shopping restrictions in the next 3 months?
2. In the UK we saw the biggest ever month in terms of grocery shopping. Next we are going to see the fewest shopping trips ever. We need to understand whether an increase in spend per trip will be enough compensate for this reduction.
3. If China is where we should look to learn lessons, then expect a reduction in FMCG spending in the six weeks. But are the conditions different elsewhere, given lockdown occurred one week after their New Year? We expect not that much, but let's see.
4. There are four broad ways that COVID-19 will impact your category. Differences will be driven by the scale and local conditions, China likes seasoning; others will like baking! A lot of categories stockpiled and didn’t increase rate of usage in lockdown. Expect the same in most countries.
5. We expect famous advertised brands to do well in the crisis. If the category grows too, then some brands will experience best ever years, i.e. long-term brand effects will show their benefits more than ever.
6. The immediate move to safety first shopping in China should happen everywhere. We expect a number of small, but highly innovative new players, to potentially emerge during lockdown and remain buoyant in recovery.
7. The largest ever 4 weeks worked as we expect – a mass movement shift across all buyers. This is how brands grow too, of course.
8. The primary growth drivers are always the same (including in a crisis): more shopping trips for retailers; being in more baskets for categories and brands. More baskets will be driven by new buyers especially. More spend in a basket is usually an added bonus, but should not be the primary aim.
9. We expect personal care occasions to be under pressure as we don’t go to work… out of the house! This is where the creative thinking community can really earn their money in the next 3 months.
10. If personal care is likely to take a back seat, there are many food and drink categories that are likely to grow. We are interested in the number of occasions – it could easily grow as we discover new in-home breaks and meal times. This is one to really understand as quickly as possible.

The hygiene measures laid down by health authorities since the coronavirus crisis began have led to hand soap entering 1.5 million new Spanish households, according to the data published today by Kantar, the leading consultant in consumer panels. In this period, hand soap has made its way into more homes than regular Coca-Cola, the product that tops the Brand Footprint ranking for fast-moving consumer goods.

“It’s not just that we’re washing our hands more frequently; to a large extent we’re also are changing what items we’re buying.  Once the lockdown began, half the population (49%) said they had purchased face masks to protect themselves, and 24% stated that they had bought some kind of vitamin supplement to boost their immune system, while only 10% and 9% respectively had done so at the onset of the crisis, in late February,” explains Rosa López, expert in consumer panels at Kantar.

This increase in certain categories contrasts with a drop in the number of homes that are spending on products such as beauty creams and make-up. This has led to hygiene and cosmetics becoming one of the most polarised categories due to the new consumer habits adopted after the arrival of the COVID-19 virus in Spain.

Personal care products are leading sector growth

In order to comply with the health guidelines, people began to stock up on hygiene and cosmetic products before FMCG, with widespread purchasing of hand sanitiser gels and hand soap. This placed the average expenditure in the category at 9.61 euros in the week of 24^th February to 1^st March, a figure above the previous weeks’ average, which had hovered around 9 euros. This spending rose steadily until the week of 16^th-22^nd March, when lockdown began and cosmetics stores and other shops had to close their doors, which also caused the average expenditure in the category to drop to 7.15 euros.

Within the category, there is also a notable polarisation between hygiene products and perfumes and cosmetics. The personal care category saw an 11.6% increase in value with respect to the same period the year before (from 24^th February to 22^nd March), driven mainly by the increase of over 1.5 million households that have purchased hand soap.  Other products in the category whose purchase volume has risen are bath gels, shampoos and hand creams, due to the heavy use of bleach and hand sanitiser gels. On the other hand, categories such as make-up and fragrances have seen their value fall.

“It’s not just that the cosmetics stores and specialised shops are closed. As people aren’t leaving home, we’re seeing that they’re wearing less make-up, putting on less perfume or shaving less frequently. According to our data, in the last few weeks, up to 47% of Spaniards admit to having spent less time on their care and beauty routine. But this doesn’t mean they’ve given up on it entirely. For example, we’ve seen that many people are still using face and hair masks, as well as hair colouring products,” explains the Kantar expert.

As is the trend for the FMCG industry, Spaniards are going to regional and local supermarkets to shop for cosmetics and hygiene products. From 24^th February to 22^nd March, these establishments have seen an increase not only in the volume of shoppers coming in search of cosmetics and hygiene products (+3.3% with respect to the same period in the previous year) but also in the frequency with which people are shopping for these items (+7.5%).

“With the closure of specialised shops, consumers are going to their local neighbourhood supermarkets to shop, and picking up their cosmetics and hygiene products there, which has increased the sale of own label products, particularly in make-up (5.7 percentage points) and personal care (3.9 percentage points). As these brands are often more affordable, it explains why the average hygiene and cosmetics receipt has dropped by 2.6%, despite more products being purchased in the category,” says Rosa López.

What the post-Covid-19 consumer will be like

The uncertain landscape caused by the coronavirus has left its mark on the purchasing habits and behaviour of Spanish consumers, but what it hasn’t changed is their view of advertising. According to Kantar’s Covid-19 Barometer, 8 out of 10 Spaniards are in favour of brands continuing to advertise their products. That said, ads should take into account the current context, and brands must not be perceived as being insensitive or opportunistic, but as helpful and offering a positive outlook.

“‘When all this is over’ has become one of the buzz terms for facing this situation of uncertainty caused by the coronavirus, but no one knows exactly what’s going to happen,” explains Rosa Lopez. “What we do know is that we will be confronted with a consumer with new needs, values and behaviours who certainly won’t shop like they did before. For example, shoppers will be more digitally-oriented. But if we look at China, we can see how after the ‘crisis’, consumers are anxiously waiting to go shopping again and using products that were not so necessary to them during lockdown, such as beauty and personal care items”.

60% of people getting involved in DIY over the next few weeks are going to do some painting inside the home, 40% are planning to get the garden ready for warmer weather, and 27% of people will be painting sheds or fences.

Joanna Parman, strategic insights director at Kantar, comments: “Spring is always a popular time for home improvements and getting gardens in order. This year, as we are forced to spend more time indoors, people are looking for ways to keep the boredom at bay and also to make their homes places that they and their families can enjoy.  With the government advising people against moving home during the current lockdown, it’s likely that a number of consumers are taking the opportunity to renovate their existing properties – a case of can’t move, improve.

“We expect this increased interest to have significant impact on an industry where sales from bricks and mortar shops alone amount to £4 billion annually – with the potential to attract a new generation of shoppers and drive investment in online stores and delivery services.”

Generation game

For many, restrictions on movement have freed up time to do jobs that they’ve been putting off for a while.  Joanna Parman comments: “More than two thirds of people who delayed a DIY job last year did so because they didn’t have time.  With holidays cancelled and pubs and restaurants closed, 40% of us are planning to do a DIY job we delayed doing last year.

“Young people are more likely to be turning their hand to DIY for the first time as a way to pass the time as college and university courses are put on hold and large numbers are furloughed by employers.  Half of 18 to 24-year olds will be doing a DIY job because they have got time to fill, 25% of them fancy a change and 30% feel like they have more money to spend on DIY now.  Interestingly, environmental issues haven’t gone away for young people during the crisis and 60% of them would still consider the sustainability of a product before buying.”

Joanna adds: “Young people have limited resources, and activities like DIY tend to lose out to other priorities like spending on living costs and socialising.  Retailers will be watching closely and considering how they can maintain their custom once life starts to return to normal – improving their own green credentials could be one way to do that.”

Is the future online?

With non-essential stores closed, consumers will need to consider what they can achieve with the supplies that are available.  Joanna Parman explains: “We all have to stay at home as much as possible at the moment so it’s good news that many people (41%) already have the tools and materials they need to complete their tasks, while 25% can at least get started before stores re-open.   

“Crucially, 80% of people would choose an online delivery service to get their supplies while shops are closed.  This reflects how seriously the public is taking advice about social distancing as well as a broader trend – most shoppers, and particularly young people at 37%, find traditional, large DIY stores overwhelming and would prefer to shop for tools and materials on the high street.”

Observation 1: Strict quarantine policy leading to more spare time for in-home cooking

Kantar’s nationwide survey in February 2020 revealed that 75% of respondents claimed to follow the quarantine policy and cancelled social activities during the pandemic. In the meantime, from Kantar Worldpanel’s survey conducted in North China, we found out that nearly half of respondents claimed to be buying more fresh food than before. The high year-on-year growth of cooking seasonings after the Chinese New Year also implies that consumers have been spending more time in the kitchen preparing meals.

In addition, cooking is a fun activity to kill time during the quarantine. Top growing sauces in our data are broth, curry and cheese, due to people’s interests in new cooking recipes. On Weibo, “homemade dish challenge” became a trending topic with over 2,260 million views. Also, searches for new cooking machines like rice cookers, barbecue grills, and blenders on ecommerce platforms further proved that new cooking occasions are growing in popularity in China.

Implication 1

In the short term, the “revenge-consumption” caused by COVID-19 will raise people’s interest in cooking and demand for new cooking recipes and ingredients. With more time spent with families and close friends at home, consumers will possibly keep the habit of in-home cooking, which implies that they will maintain their high demand and requirements for fresh ingredients. In normal times, “convenience” is a key need for in-home cooking due to people’s shortage of time. Curry, ketchup and other easy-to-cook sauces will be optimal choices for consumers.

Observation 2: Fresh food’s nutritional properties fit with people’s health concerns

There’s no doubt that COVID-19 has raised public interest in health. The number of searches on keywords like “health” and “immunisation” increased by over 1000% after the outbreak. Mainstream media like CCTV also reported that the protein and vitamins in fresh dairy and vegetables can boost immune systems. Moreover, more young people started to share their in-home cooking of veggie smoothies and healthy diets along with in-home workout through vlogs, which further encouraged more people to adopt a healthy lifestyle. The older, “silver” generation also claimed that they would spend more on fresh food than before to keep in good health.

In addition, many live-poultry markets are permanently shutting down and being replaced by industrial processes. Nevertheless, “fresh” meat, live freshwater fish and seafood are popular by consumers since their perception is that being alive is associated with healthy, high-quality products.

Implication 2

People’s increased attention on health will not decline as the pandemic goes away. On the contrary, three-quarters of respondents in a survey by Kantar's Health division said that they will be more concerned about health after the COVID-19 pandemic. It will bring new opportunities for manufacturers to add “nutritious” and “healthy” messaging to communications to follow this consumer trend and promote public health education. Healthy fruit and vegetable snacks also have some market potential. On the other hand, fresh retailers should not overlook the importance of poultry and meat products’ freshness and nutrition to attract consumers.

Observation 3: Outbreak acts as the catalyst for digital purchase behaviour

Driven by the rapid development of mobile ecommerce, the delivery of fresh food has been sky-rocketing since 2018. Traditional channels like free-marts will continue to lose share. In 2019, the average number of channels through which a shopper buys fresh food increased to five. As expected, consumer demand for fresh delivery has surged during the COVID-19 period. Many O2O and ecommerce platforms like Miss Fresh also introduced “contactless” delivery to avoid direct contact. In Jan 2020, O2O and online penetration for fresh food reached 20% and 22% respectively in Urban China. The online penetration particularly shows a fast-moving trend toward less developed areas: tier 2 and 3 cities; and the silver generation with their increased mobile usage. Wechat is another popular channel for the community or neighbourhood purchase of fresh food. A survey by Kantar's Consulting division found that nationwide, 35% of respondents used Wechat for fresh purchases in February 2020.

Implication 3

With the arrival of O2O 2.0 bringing in new buyers, fresh food retailers should consider how to retain them after COVID-19. By 2022, Online + O2O is expected to triple its market size, projected to reach 15% market share in the fresh food category. According to Kantar data, 42% of new online buyers claimed that they will consider a combination of online and offline shopping after the pandemic, which means that omni-channel is the key trend for fresh purchase.

On the other hand, as online limits the consumer’s selection process, one of most common complaints is the consumer’s low satisfaction of fresh product quality. Therefore, especially for O2O channels, it is really important to retain consumers by providing high quality, fresh products. Meanwhile, retailers should collaborate with manufacturers to adapt their offer to new consumer needs who order from O2O or online. For example, since convenience and health are two significant market trends, offer “convenient” combination packs, such as multi-fruit snack packs. Moreover, in view of different family sizes, fresh dish ingredients packed along with recipes fitted to specific family needs could be more attractive. Also, nutritional facts summary and health benefits could be added in a product page description in addition to fresh delivery details.

David Berry, commercial director at Kantar, comments: “Over the past month we have faced profound changes to our daily lives as a result of the need for social distancing, impacting the way we work, shop and socialise.  Retailers and their staff have risen to an enormous challenge since restrictions on movement were announced on 12 March.  They have been on the frontline as households across Ireland prepared to spend more time at home, with more mouths to feed.”

Grocery sales reached €2.8 billion in the past four weeks – topping last year by €250 million and exceeding the previous peak seen at Christmas 2019.  The average household spent an additional €122 on groceries during the four weeks to 22 March, largely driven by shoppers making bigger trips.  Last year, 15% of households made a shopping trip containing €120 or more of groceries – this year that figure almost doubled to 27%.

At the top of the list for many shoppers were personal hygiene products and non-perishable foods.  David Berry continues: “The products demonstrating the strongest growth show a country putting health, hygiene and practicality first.  Sales of hand soap rose by 300% and household cleaners were up by 170% in the four weeks to 22 March.  Facial tissues and loo roll were also in demand, with sales up by 140% and 86% respectively. 

“Looking at our food choices, items with a longer shelf life saw the biggest uplift, as sales of frozen and ambient foods, meaning those that can be stored at room temperature, increased by 32%.  By comparison, demand for fresh food has been more modest – growing by 16% over the last four weeks.  While we’d expect sales to remain strong in the coming weeks and months, there will likely be a rebalancing of sales of fresh and non-perishable items as shoppers with full freezers and cupboards replenish fresh supplies.”

More households than ever before placed an online order in the four weeks to 22 March 2020, with approximately one in 10 households taking advantage of the service.  This represents 25,000 more shoppers purchasing groceries online than last Christmas, the previous peak, and 54,000 more than the same period in 2019. 

All of the country’s main grocery retailers were simultaneously in growth over the 12-week period as sales were boosted by unprecedented levels of demand. 

David Berry comments: “All the major retailers have adapted to rapidly changing circumstances, with teams working hard to keep shelves stocked during an incredibly busy time.” 

Dunnes, SuperValu and Tesco each saw sales increase by just over 10%.  While the three grocers hold almost equal market share, Dunnes’ takes the largest portion at 22.3%, with SuperValu and Tesco following closely at 21.3%. 

Lidl was the fastest growing of all the retailers during the 12 weeks, boosting sales by 14.7% and increasing its market share to 12.3%.  Aldi matched Lidl’s market share and grew sales by 11.9%.

Fraser McKevitt, head of retail and consumer insight at Kantar, comments: “It has been an extraordinary month and social distancing measures have had a profound impact on all our daily lives – from the way we work and socialise, to how we shop and care for our loved ones. Retailers and their staff have been on the frontline as households prepare for an extended stay at home, with grocery sales amounting to £10.8 billion during the past four weeks alone – that’s even higher than levels seen at Christmas, the busiest time of year under normal circumstances.”

While week-on-week sales were growing strongly at the beginning of the month, it was on Monday 16 March that the public headed to the shops in unusually high numbers. Between Monday 16 and Thursday 19 March, 88% of households visited a grocer, making five trips on average – adding up to 42 million extra shopping trips across four days.

Growth has been primarily driven by people making additional shopping trips and buying slightly more, rather than a widespread increase in very large trolleys. The average household spent an extra £62.92 during the past four weeks, equivalent to adding five days worth of groceries. Shoppers in London, where the outbreak is reported to be a few weeks ahead of other regions, increased their spending the most, up by 26% during the month. Fraser McKevitt comments: “It’s inevitable that shoppers will add extra items to their baskets when faced with restrictions on their movement and possible isolation if one of them becomes unwell, but many families are also adjusting to having more mouths to feed. Those with children over the age of 16 spent £508 this month on average, £88.13 more than they did in March 2019 – a trend that likely reflects students returning home from college and university.

“With restaurants and cafés now closed, none of us can eat meals on the go any longer and an extra 503 million meals, mainly lunches and snacks, will be prepared and eaten at home every week for the foreseeable future. Those already missing their favourite haunts have been stocking up to recreate trips to the pub with friends over apps like Houseparty and FaceTime – boosting alcohol sales by 22%, an additional £199 million in the past month. Purchasing of food and drink items for store cupboards rose by 28% during the past four weeks and by the same again for frozen goods.”

Convenience stores appeared to benefit from people shopping more often and following guidance to stay closer to home. Collectively, smaller branches of the major retailers and independently-owned outlets increased their share of spend to 13.3%, growing sales by 30% compared with the same four weeks a year ago.

Grocery spend online was 13% higher than the same period in 2019 and Fraser McKevitt comments: “The average online basket size surged to £81.88 this month, over £6 more than in March 2019. Government advice may have been to get groceries delivered if possible, but limited delivery slots meant that only 14.6% of households received an online delivery in the past four weeks, up from 13.8% in March 2019 but probably well below actual demand.

“Most of us still relied on the full-size, bricks-and-mortar stores operated by Tesco, Sainsbury’s, Asda, Morrisons, Waitrose, Aldi and Lidl. They took 76% of spend through their tills in the past four weeks, with sales 19% higher than March 2019.”

Looking ahead, Fraser McKevitt comments: “We expect restrictions on movement and relatively full grocery cupboards will mean the incredibly high levels of shopping trips made in March will drop off over the coming weeks. Regular trips to smaller local stores are likely to continue, as people avoid travelling and queues at stores with one-in-one-out policies in place. Sales of long life and non-perishable items will slow as households work their way through stocks and consumers will focus on replenishing their supply of fresh foods.

“While much-reported panic buying has been concentrated to a relatively low number of individuals so far, we anticipate that this too will subside as consumers gain confidence in the retailers’ abilities to maintain grocery supplies and keep stock on the shelves.”

An update on the grocers

Fraser McKevitt comments: “During a time of unprecedented demand, all ten of the largest retailers were simultaneously in growth during the past 12 weeks – something we haven’t seen since October 2018. Meanwhile, independent retailers and symbols, which includes Spar, Nisa, Premier, Londis and Costcutter, provided welcome access to groceries close to home, and sales rose collectively by 16.1% this period.

“Lidl’s sales were up 17.6% during the 12 weeks, as its market share increased by 0.5 percentage points to 6.1%, while Aldi reached a new record high market share of 8.2%, growing sales by 11.0%.

“With growth of 7.4%, Sainsbury’s was the fastest growing of the traditional big four this period, followed by Tesco at 5.5%, Asda at 4.9% and Morrisons at 4.6%. Iceland benefited from shoppers stocking up on frozen items, with sales up by 11.7%. Its market share rose to 2.2%, up by 0.1 percentage points on last year.

“Co-op’s extensive number of convenience outlets helped to attract people looking to shop locally and its sales increased by 9.4%, while Waitrose’s sales grew at the fastest rate since November 2013, up by 7.5%.

“Despite a temporary halt on deliveries to new customers in March, online specialist Ocado still acquired 133,000 new shoppers during the past 12 weeks, helping it boost sales over the same period by 12.5%.”

In a setting of an unchanged aggregate Gross Domestic Product (GDP) versus a year ago, fast-moving consumer goods (FMCG) remained stagnant (0.2%), even though three countries grew between 1% and 3% (Brazil, Ecuador and Colombia) – but that was not enough to offset the declines in Chile (-1.3%) and Argentina (-6%).

The recent outbreak of Coronavirus might trigger growth in personal and home care in 2020, following declines recorded by the six countries across the region during 2019. In China, items with disinfecting properties increased sales exponentially in the first few weeks following the outbreak. The H1N1 pandemic had a similar affect in Latam a decade ago so might be expected to again during this crisis.

An interesting development, during the last crisis, was in Colombia where private labels rose to 19% of total spend. This directly affected mainstream brands, but not the premium ones, suggesting that consumers will not choose only on price.

Although still relatively small, there is an acceleration in the ecommerce channel as well as both Cash and Carry, and drugstores, which went on growing at double-digit rates. Our recommendation is to not overlook hypermarkets, which are becoming more important to shoppers and also allow manufacturers to showcase their innovations.

In 2020, it is expected the GDP might influence the growth of FMCG in Brazil, Colombia and Mexico, which ended 2019 with gains in the last quarter, whose contribution came mostly from the lower classes.

Get in touch with our expert if you’d like to learn more about the full report.

During the first two weeks of the outbreak, in-home ice cream sales increased 18% year on year, the following fortnight this accelerated to 37%, surpassing the growth of both food as a whole and snacking.  This is quite a different effect to 17 years ago when SARS hit China and ice cream sales actually lagged those of food and other snacks.

Looking ahead to the future, once the pandemic has ended, Kantar Worldpanel considers what ice cream manufacturers might be able to do to build on this unexpected upturn in consumption.

01. The emergence of In-home consumption

Compared with other countries (including neighbouring Vietnam and Indonesia), eating ice cream at home is not a common activity for Chinese people. In fact, less than 50% of Chinese families buy ice cream for in-home indulgence and family sharing every year.

In the three years from 2017-2019 the volume contribution of in-home consumption during the month of Chinese New Year was less than 25%. Yet under the impact of quarantine regulations, in 2020 this increased to 37% . Despite the rising priority for fresh food, staples and hygiene during this time, the love for ice cream is still there, and people are satisfying their need in home when it isn’t easy to go out.

The growth of ice cream in the last year was due to price rises as the category became more premiumised. However, during the first and most crucial month of COVID-19, the growth was due to more shoppers, more frequent purchases and bigger trips. 

This growth clearly reflects the role that ice cream is playing when people are working from home and sharing time with their families.

Tips for manufacturers

• Although the sustainability of in-home consumption for ice cream is still to be seen, investments to explore and understand in-home occasions will pay off hugely.
• In the short term, it is essential to redistribute media support towards indoor touchpoints, especially on online platforms.  Ensuring stock levels in in bricks-and-mortar stores, particularly small modern trade formats and grocery are the top priority.
• In the longer term, besides trade and marketing efforts, innovations to offer more healthy products will help maintain and grow share.   Rising health concerns could be the biggest constraint to future growth.

02.  The year round opportunity for consumption at home

Ice cream consumption peaks in summer when hot weather triggers the need for something cool.

In 2019, 55% of OOH and 72% of in-home annual volumes of packaged ice cream were consumed within four months, from mid-June to early-September. During the summer, consumption increased by +80% for OOH and by +133% for IH, much higher than the uplift for treats and snacks in their peak season. 

This comparison demonstrates the crucial role of summer, but it also shows that the low season generates only 28% of ice cream sales over eight months.  This raises the question of how much brands have tried to leverage the low season to grow the brands in home.

Tips for manufacturers

• To capture in-home ice cream occasions in low season, brands should consider the triggers of purchase at different time of the year. While taste accounts for 30% of the occasions, “refreshing” is more likely to trigger purchases during summer while “want something rich” and “to treat myself” are more appealing reasons in low season. Understanding this means that brands can customise their communications for different times of the year.
• The environment is a concern to many and there is currently a lot of plastic used in the packaging of ice cream.  Working to address this would help brands stand out and could help ensure sustainable growth.

After tremendous efforts to contain the virus, China started to see a cool-down in the spread of COVID-19 towards the end of February 2020.  According to experts, the epidemic is forecast to end by Q2 2020. Until then, ice cream brands should leverage this opportunity to convert and educate consumers about in-home pre-summer consumption, not only to compensate the loss of OOH in the short term but also to open a new development area for the future.

At the same time, we should be well prepared for the upcoming hot season when things hopefully get back to normal and OOH consumption revives.

References

 https://cn-en.kantar.com/business/health/2020/health-awareness-and-behaviors-during-covid-19-epidemic/

Notes to Editor: Treat and Snack = Biscuit, Crispy Snack, Confectionery (Chocolate, Gum, Mint, Fruity Candy)

Analysing the shopping habits of over 100,000 UK consumers, Kantar found that just a minority of people are engaging in what might traditionally be thought of as stockpiling.  For example, 6% of liquid soap buyers have taken home extraordinary quantities, and only 3% of dry pasta shoppers. 

Instead a significant number of consumers are adding a few extra products each time they visit a store.  The average spend per supermarket trip rose by 16% in the week ending 17 March to £22.13 compared to the same week a month ago.  As consumers reallocated spend to groceries, supermarkets took 51% of all retail sales, an increase of 7 percentage points on mid-February. 

Customers are also choosing to shop more often, exacerbating the impact of slightly larger baskets.  An additional 15 million supermarket visits were made in the week ending 17 March, compared to the week ending 17 February.      

Fraser McKevitt, head of retail and consumer insight at Kantar, says: “Most of us have seen images circulating online of people bulk buying products like toilet rolls and pasta, but our data gives us a different, if counterintuitive, diagnosis of what’s happening. 

“Ultimately we need to look at the empirical evidence and it tells us that temporary shortages are being caused by people adding just a few extra items and shopping more often – behaviour that consumers wouldn’t necessarily think of as stockpiling.  People will also be eating in more as a result of social distancing and increased working from home.  Consumers spend more than £4 billion each month on food and drink out of the home, a significant proportion of which will now be channelled through the supermarkets.”

Fraser continues: “It’s not just how much people are buying but what.  We’re seeing customers shop beyond their normal, regular product choice, putting pressure on supplies of items that aren’t usually bought as often.  Purchasing typically made over a couple of weeks or longer is being concentrated into a few days.

“Retailers have adapted to make sure everyone can access the products they need, with many restricting the number of any one good each customer can buy.  However, the cumulative impact of a little extra, a little bit more often means these measures may have limited effect in the short term.”

Sales of toilet tissues rose by 60% year-on-year for the week ending 8 March 2020, while dry pasta sales were up 55% and baked beans by 48%.

Alongside supermarkets, health and beauty stores, bargain retailers and convenience stores all saw a rise in sales during the week ending 17 March, with trips increasing month-on-month by 25%, 29% and 19% respectively.  Meanwhile, visits to pet stores went up by 27%.  Conversely opticians, clothing stores, sports shops, auto specialists and unsurprisingly restaurants have been hit hardest by the downturn in trade.

Kantar is analysing the numbers regularly to keep clients updated. Fraser concludes: “Retailers and manufacturers are working hard to respond to customers’ needs.  It’s important for them to understand what the new essentials are for consumers and what the ‘new normal’ might look like once this crisis passes.”

Gen Z (born 1997-2012) have grown up in a fully immersed digital world. Their first phone experience is more likely to be smartphone and subsequent purchases will come from the position of an experienced smartphone user. Therefore, the influences and decisions throughout their purchase journey look quite different than that of Gen X and earlier generations. In the US today, 95% of mobile phones owned by Gen Z and Gen Y (born 1981-1996) are smartphones, this is even higher in EU5 and urban China, each at approximately 97%.

Compared to three years ago, there has been a rise in Gen Z smartphone owners making handset purchases themselves, increasing their control over purchasing decisions. In 2019, 68% of smartphones owned in EU5 (UK, France, Germany, Spain and Italy) were self-purchased compared to 62% in 2017. Self-purchase has also increased among Gen Y.

So, whether a first-time or replacement purchase, what are self-purchasing Gen Z and Gen Y smartphone buyers looking for?

• More than other generations, the main criteria Gen Z and Gen Y have for choosing a smartphone are design/color and multimedia capabilities such as internet browsing, music, video, etc. Let’s not forget, these generations are those who maximise the average number of activities performed on their smartphone. It is their preferred device for most activities over tablet, laptop or a desktop.
• When it comes to handset, Gen Z on average have more reasons for purchasing.
• In the EU5 for Gen Z the camera is especially important, with three out of five smartphone owners buying for this reason, specifically for the quality of the rear camera and app features. Just over 50% of Gen Y purchase their device for the camera and are more likely to look for dual lens and quality of photos in low light.
• In the EU5 Gen Z are also more likely to be choosing their device for the new technologies i.e. face recognition and 5G capability, whereas Gen Y are choosing for quality of the hardware i.e. material and speed of processor.
• While desirability is still true in the US and Australia, early upgrade options also trigger purchasing. The global prevalence in trade-in schemes has increasingly influenced Gen Z and Y’s purchase. This enables consumers to access the latest devices and manage their budget. Should this behaviour be carried forward into future purchasing we can expect to see replacement cycles shorten.
• In urban China, compared to earlier generations, Gen Z and Gen Y are more likely to be driven by a desire for the latest model or a newer device rather than a need to change i.e. experiencing functional issues with their device, like slowing down.

In the week of 2-8 March, spending went up 9% on consumer products compared to the weekly average of the previous two months. The week before, which when Spain began to feel the first effects of the pandemic, this growth was 13%. The increase was spurred by higher purchase amounts (+5%) and greater purchase frequency (+3%) compared to the average for the year’s first eight weeks.

In the week analysed, the increased consumption was noted in all categories, but particularly packaged food and beverages, cleaning products and baby products, where spending rose by 18%.

Within packaged food and beverages, the highest growth was in cereals (38%), vegetables (37%), cocoa (25%), rice (22%) and pasta (19%). However, there was evidence of an increase in indulgence foods, such as chocolate (23%), olives (68%) and beer (20%), in anticipation of the closure of bars and restaurants. 

As for cleaning products, cleaning liquids are still leading the increase (19%), followed by growth in complementary categories such as sponges (15%) and air fresheners (14%).

According to Kantar, this is down to the fact that “after an initial period of stocking up on more basic categories such as water, milk, conserves, bleach and disinfectants, hand soap and toilet tissue, which we could qualify as the “bunker effect”, in the following week consumers added to their shopping trolleys other categories that would complement the most essential goods, and even allow themselves a moment of pleasure during their home confinement”.

In terms of channels, the greatest consumption increases are in online and local shops, risingby 0.3 and 0.2 points respectivelycompared to the average for the first eight weeks of the year. Online continues to attract 2.7% of Spanish households (+11%), with an even higher purchase amount than normal (+17%). 

During the period observed, the rise in the purchase of consumer goods is proportional to the degree of concern for the current situation. Thus, regions with greater concern have shown a higher increase in food and cleaning product purchases, with 15% growth in Eastern Spain and Andalusia and 8% in Madrid.

By demographic group, the growth is especially strong in the younger groups: 35% in young people who live outside the family home, 21% in single-parent homes and 19% in couples with small children.

With the coming of the first containment measures, the population has become more aware of the situation and has begun to apply on a massive scale a greater number of preventive measures: not frequenting crowded places, lower consumption in bars and restaurants and more frequent hand-washing.

In terms of out-of-home consumption (OOH), Spanish consumers only reduced this when “forced to” by the closure of establishments, “making it foreseeable that there will be a rapid recovery once confinement ends” added Kantar.

Notes to editors
Period analysed: week of 2-8 March
Source: Kantar Consumer Panel Spain

The top 10 sites in terms of spend**

**Market share ranking in descending order - 100% physical goods from websites other than Supermarket websites.

Amazon is the site that has grown the most in absolute value, an increase of €1.14 billion in one year, this represents half of the e-commerce growth in France in 2019 and is 2.7 times more than the market share of the second site, Cdiscount.  This is continuing an upward trajectory of growth over the last three years: 17.3% in 2019 and 17.6% in 2018.

Kantar estimates 22.2 million French people have placed an order on Amazon, each spending a total of €349 in 2019, an increase of 12%. The frequency of purchases on the site has increased by 11.4% to an average of 9.8 orders per customer each year. In total, Kantar estimates Amazon's business volume from French people to be 333 million items which is worth €7.73 billion (incl. all taxes).  

Marketplace, Amazon’s platform for third-party sellers, continues to grow.  For every €100 spent on Amazon in France, 52% is on products purchased in marketplace, up from 49% in 2018 and 43% in 2017.

Online expenditure now totals €40.37 billion for purchases of physical goods. Key facts about the trends are:

• The growth of online purchases in France is still high, but slowing overall from 10.9% in the year to 2018.
• The growth of online purchase is driven by the frequency which is now at 21 orders per year on average, an increase of 8%.
• The number of customers is stable with a penetration level of 68% although there are high disparities according to age.  Penetration is at 80% among 35-49 year olds and 50% for those over 65 years.
• The split of sales stands out.  Expenditure on the marketplace platforms have grown by 24%, while sales directly from retailers have grown by 2.8%.
  • Fashion (textiles, footwear, leather goods, etc.) represents 19% of the market and increased by 12%
  • Products for the home (interior decoration, DIY, tableware, gardens/swimming pools) represent 18% of the total and increased by 13%.

Month-on-month growth was very inconsistent in 2019. Growth was more than 10% in January, July and October. In November, which is when Black Friday fell, the number of transactions was high at 77 million, an increase of 3million (vs Nov 2018) but the average budget per order dropped, which had a negative effect on growth that month.

Notes to editors

*Source of information:

This information comes from e-commerce, a Kantar Worldpanel solution. E-commerce is a representative sample of 12,000 French individuals aged 18 and over (universe of 49,529,020 individuals). The result can therefore be extrapolated to the behavior of individuals in metropolitan France.

The members of this representative sample declare the purchases they make on the internet, on an ongoing basis, by confidentially transferring the appropriate document (copy of email, order form, invoice).

This method allows the integrity of the data collection to be secured and the performances by sector/category/websites and market places to be broken down with a high level of certainty, in full independence of the web actors.

E-commerce also allows the performances of web actors to be compared and explained over time according to their behaviour levers (number of customers, purchasing frequency, and size of shopping baskets, loyalty, diversity of purchases between the sites, etc.) while providing a detailed profile of their customers. 

Study period: Year 2019, the comparisons are made between 2019 and 2018.

Product scope:

• All physical goods purchased on the Internet (except for travel, transport, and hospitality),
• B to C, purchases on .fr websites, but also on sites based abroad and that deliver to France,
• Delivery costs are not included and the results are not reprocessed for product returns.

Scope of sites: the market shares are calculated for all “websites except Supermarket websites”

In the first two months of 2020, before the virus had arrived in Portugal, we could see a difference in the way Portuguese consumers were shopping.  They were buying more per trip with an increase in spend of 11%  per occasion and shopping less frequently with one less shopping trip than in 2019. This was a completely different pattern from 2019, when shoppers went to stores more than they had in several years.

In this shift towards stocking up, it was the food and beverage categories that initially emerged as the top priorities for the Portuguese (+10%), but were quickly followed by home care products (+7%) and paper products, such as tissues, toilet paper and paper towels (+8%), in a clear response to the virus’s possible quick arrival to Portugal. In the food sector, in addition to the noticeable preference for convenience products such as canned and frozen foods, the Portuguese shopper also prioritised essential fast-moving categories at the point of purchase, such as fish, meat, and eggs.

In personal care, although there was a growth of +3% there were some important changes in the items chosen. Products not regarded as a priority such as body moisturiser, hair conditioner and hair-styling products, were replaced by soaps, both liquid and bars, shower gel and wipes, all key products for personal hygiene.

At this point, the online channel also started gaining importance for those looking to stock-up and in February recorded the highest spending per transaction in the past 12 months. In direct comparison to the month of January 2020, Portuguese shoppers started spending +19% more per basket, on average, and also increased the number of categories purchased, from 10 to 13.

Over the next few weeks – or maybe months – there will be many uncertainties before a new “normal” is been reached.  At this point the reaction of all players, brands, and retailers will have to be swift and responsive to people’s changing needs.

The new in-home panel applies a 100% smartphone data collection method via a specially designed application called PanelSmart with barcode scanning function. This enables 1,000 East Malaysian households to conveniently provide information on their actual purchases (not claim or recall) over 100 categories to answer the what, when, where and who behind a particular purchase.

With longer to travel from their houses to retailers, almost 50% of trips for East Malaysians are big shops. They need to optimise each trip and so tend to buy more categories per trip. This means cross-category interaction is high in East Malaysia so pairing categories is an important consideration for brands. They also tend to have a larger household size as East Malaysians have multiple families living in each household and they buy more categories to cater for different members.

The new panel will also help to better understand the impact of local cultures on East Malaysian choices for fast-moving consumer goods (FMCG) categories and brands. Hari Gawai is a significant occasion when East Malaysians celebrate their harvest and is comparable to Chinese New Year. At this time categories such cold beverages like carbonated soft drinks will see more traffic.

This panel expansion will be able to support both global and local clients with a better understanding of shoppers’ interactions with brands and retailers to help them discover new opportunities for growth in this fast-developing market.

In the first two months of 2020, inflation increased by 5.91%, the highest it has been in the past seven years. As a result, domestic demand for consumer goods posted a weaker performance than the same period last year with an increase of 9.8% compared to 14.4% in 2019.  This is the lowest growth rate since 2014, according to The General Statistics Office of Vietnam.

Within the fast-moving consumer goods (FMCG) industry, the spread of COVID-19 is disrupting FMCG businesses but not all categories and retailers will see a negative impact. Kantar is closely monitoring the impact across different shopping channels to shed light on how consumers’ behaviours are changing, to help  brands and retailers to respond to them in this VUCA (volatile, uncertain, complex, ambiguous) time.

1.    More stocking up and less socializing

Based on Worldpanel data, Vietnam’s FMCG market growth shows a slowdown in the first two months of 2020 despite 2019’s optimistic picture. The dairy, packaged foods and personal care caetgories have managed to sustain growth while beverages has suffered a decline despite this being high season (Lunar New Year aka Tet). This is possibly explained by the lower numbers of parties and celebrations as Vietnamese people avoided socializing and gathering in a bid to reduce their exposure to the virus.

In order to deep dive into the impact of COVID-19, which started from the week right after Tet Eve (the 1^st day of Lunar New Year), we have realigned the reporting period based on the lunar calendar to make the data really comparable. By looking at consumer purchase behaviour in the four weeks after Tet 2020 (post Tet period) compared to the same period last year – four weeks after Tet 2019, we are now able to see how COVID-19 has initially affected Vietnamese consumers’ FMCG spend and purchase behaviour

*Blue line: Data period 4 weeks ending 23 Feb 2020 vs 4 weeks ending 3 Mar 2019

Vietnamese consumers in the urban four key cities show a tendency to stock up across three groups of categories. Firstly, they spend more on categories that offer personal and family hygiene in order to remain clean and kill germs. Hand wash, bar soap and household cleaning products are all seeing double- and even triple-digit rise. Secondly, convenience foods and cooking aids also surge during the outbreak, as people eat at home more probably due to the fear of catching the virus as well as the extended home stay of children who haven’t been at school. Frozen food, canned food, instant noodles and cooking oils are a few categories enjoying impressive growth. The other group of categories that consumers seek for during this time are immune-boosting and nutrition products, especially for seniors and kids who are at higher risk. Therefore, specialty milk powder and drinking yoghurt are more favoured to stay healthy.

On the end of the spectrum, consumers are cutting celebratory categories from their basket during the spread of coronavirus. Beverages including both alcoholic drinks and non-alcoholic categories have suffered the most in this period. Beer and carbonated soft drinks are, in particular, experiencing a sharp decline.

2.    Channel movements

There are changes not only in consumers’ baskets but also in their channel choice during the virus outbreak. Online shopping prevails and booms significantly thanks to the increasing number of transactions, accelerating the growth of online FMCG spend to a triple digits just in the month since the official announcement in Vietnam. This trend is expected to continue in the coming months, especially when there has been advice from local authorities to shop online in order to avoid crowds and physical contact.With the surge in demand for protection masks and hand sanitizers among the Vietnamese, it’s no surprise to see the robust growth of consumer spend in pharmacies and drugstores including Medicare and Guardian. More purchases of hygiene products were made in these channels as consumers’ priorities for now are to protect and enhance their safety.

As the number of affected people swells, this results in panic buying among the Vietnamese in some areas, especially where there have been confirmed cases. It drives demand for stock-up, leading to the notable growth of major modern retail formats including hypermarkets, supermarkets and minimarkets. Part of the attraction of these formats is that they offer hygiene, product variety, and lots of epidemic supporting programs such as home-delivery, stable-price masks and hand sanitizer, farmer supporting sales etc. Within the big retail format, Big C is one of the key retailers to achieve a strong performance, driven by increasing both footfall and spend per trip in its stores. MM Mega market (the cash-and-carry retail model) has also picked-up during this time despite its downturn in recent years.

Meanwhile, shopping in those places most commonly used for daily needs are losing traffic as shoppers preferring “less physical contact” and make fewer shopping trips but with a bigger trip size. As such, street shops – key shopping channels, and convenience stores are seeing a short-term impact caused by the COVID-19.

Food for thought

The unexpected virus outbreak remains on-going with more and more people affected. Economic activities and business operations have been continuously disrupted. Below is some food for thought to stay safe and strong during challenging times and to be well-prepared in the post-pandemic period.

The VUCA (volatile, uncertain, complex, ambiguous) situation has been escalating very quickly in the last two months, posing challenges for all of us. In order to understand how this context may impact purchase behaviours and how brands may be able to mitigate associated risks, we are continuing to closely monitor the impact of COVID-19 pandemic across FMCG categories and retailers, on a monthly basic.

Contact us to discuss on what we can support you to deal with the crisis.

Notes to editors:

*The analysis is based on Worldpanel data, household panel in Urban Vietnam 4 key cities (Ho Chi Minh City, Ha Noi, Da Nang and Can Tho), total FMCG excluding Gift for in-home consumption.

Data period: 4 weeks ending 23 February 2020 versus 4 weeks ending 3 March 2019.

This year, due to the event of Covid-19, the needs for hygiene, nutrition and meal replacement grew significantly. The quarantine practice – either forced by government policy or voluntarily taken for self-safety – has put limits on outdoor entertainment and social interaction and generated new occasions for in-home indulgence and consumption. Targeting these new in-home occasions will be key to growth for snacking brands during this special period.

17 years ago, SARS had limited impact on the development of Treats and Snacks, as quarantine regulation was not officially implemented, and the critical time of the epidemic did not fall into Chinese New Year. Now given the coincidence of time, the change of macro landscape and the evolution of retail, we can expect a big change in how people react towards snacking.

To help Treat and Snack players find a way through this tough time and prepare better for black swan events in the future, Kantar Worldpanel made a review on consumer snacking behaviors during Covid-19.

Big challenge for gifting observed

Considerably less Treats and Snacks were received as presents during Chinese New Year and Valentine’s Day, driven by less social gatherings and the change of gift choice. Fruit flavored candy and Chocolate led the decline as they are the most relevant gifting treats, followed by Crispy Snacks. On the other hand, Personal care and Hygiene categories occupied a higher share of gifting during this time. According to Meituan, the most searched gift list for Valentine's Day on its takeaway platform is masks, goggles, and alcohol disinfected cotton tablets. On social media, presents made from fresh food and hygiene products (such as surgical-mask bouquets) went viral, as people became more realistic rather than romantic during this time.

There are still potential growth areas for Gifting during both official holidays and personal occasions. Treat and Snack players should consider re-designing the gifting offers, with collaboration and communication focusing on health and wellbeing to win hearts and wallets of shoppers.

Purchasing for in-home consumption growth

Treat and Snack purchases for in-home consumption improved across channels in the two weeks of mid-February, led by young family types, especially young singles/ couples who use snacking to alleviate the boredom during the quarantine period. Confectionery still experienced a decline for take-home purchases but the recovery was much clearer than in gifting acceptance. Chocolate tended to be the first one returning to growth.

During this special time, creating more in-home snacking occasions would be the key to success. According to Kantar online survey, watching video is the most common time-killing activity when people stay at home, followed by social media, mobile/ online games, and cooking. A redistribution of media from offline to digital, with communication related to mood lifting and specifically targeting daily micro occasions, will help brands to win new shoppers and occasions. On the other hand, suggesting new cooking recipes with snacking ingredients on fan page/ live streaming can also be a good way to improve the consumption of Treat and Snack.

After the epidemic, Food safety would be what brands should focus on, as agreed from the majority of respondents to our online survey. Additionally, more than half of surveyed consumers stated that they would spend more on Personal care and Household hygiene/sterilization products (such as mask, disposable hand sanitizer, sterilizing wipes, etc.) after the virus is contained. Therefore, ensuring product quality, smart cross-border offers and close co-operation with retailers for adjacent categories will help Treat and Snack players grow further after the outbreak.

E-commerce and O2O witnessed strong growth

Despite logistic constrains, e-commerce and O2O rise as the best solutions for shopping when people are trying to reduce physical interaction. Over the 3 weeks after CNY, e-commerce enjoyed a 15% uplift led by Crispy Snack and Biscuit.

If 17 years ago, SARS played a big role in setting the foundation for thee-commerce then in 2020, Covid-19 boosted the growth of O2O. Over the 3 weeks after CNY, O2O doubled its size in Treat and Snack. Similar to E-commerce, Crispy Snack led the trend with more than 200% growth rate, followed by Biscuit and Confectionery. As outdoor activities are not encouraged, people have a higher need for in-home cooking and consumption, leading to the growth of fresh food and ready-to-serve food delivery. Cross-category activities/promotions on key O2O platforms will help Treats and Snacks leverage the huge traffic of these staples.

The critical time of the epidemic should be long enough for Chinese people to break the psychological barriers and build up the habit of shopping via O2O. After the outbreak, an on-going development of this channel could be expected, especially among shoppers aged 30-44. However, Treat and Snack manufacturers should have a fair expectation for O2O growth when things get back to normal. According to Kantar online survey, offline channels still have a bright outlook, especially among those >40y/o. 36% surveyed consumers said they would visit hypermarkets more often and 37% said they would visit supermarkets more often. Therefore, gradually balancing the support towards offline would help Treat and Snack manufacturers adapt to the upcoming changes, whilst retaining buyers after the outbreak should be top priority for O2O retailers.

The unexpected virus outbreak is still going on and how brands can respond to these challenges remains to be seen. Although in-home consumption is now the priority, Treat and Snack players should be ready for the out-of-home competition, which is expected to come by end of Q2 when the virus is well contained.

***Treat and Snack includes Biscuit, Crispy Snack and Confectionery (Chocolate, Gum, Mints, Fruity Candy)
***2019 CNY week: Feb 2^nd – 8^th / 2020 CNY week: Jan 25^th – 31^st

There’s no doubt Thai consumers feel the threat from Covid-19, but the response has been measured, thoughtful and not overwhelmingly negative or panic induced. The health risk is most pronounced for urban consumers, in particular, greater Bangkok households. They have cut back on going out and avoided crowded areas, as evidenced by the 4% decline in shopping trips for groceries (January 2020 vs. December 2019), and the 43% increase in online grocery shopping transactions (January 2020 vs. January 2019). The concern is also evident for upcountry urban consumers, but it is not as pronounced. These shoppers have reduced their month on month shopping trips by -2% and online transactions surged +70% vs. the year before.

Impact on business

The biggest challenge for businesses is that this behavioural change has led to a sales decline of -3.5% in January 2020 compared to the previous year which is the weakest January performance in the last decade. Slowing global trade and severe drought affecting key agricultural outputs had already made 2020 a challenging year, but the current crisis is making things more acute.

Support preventative action

Consumers are not over-reacting and hoarding all products - the average number of categories bought is stable vs. December 2019. But they are stocking and focusing on the essentials and the products which they trust will allow themselves to create a “safe” environment.

As with most countries affected, Thai consumers have focused on “self-sterilisation” products. These include products such as mouthwash, soap (particularly those with strong hygiene and anti-bacterial credentials) and household cleaners.

Prevention through strong health as well as cleanliness is a clear theme. Beverages brands which show a clear added value are growing exceptionally strongly – Bird’s Nest, Essence of Chicken, functional drinks and sterilised milk to name a few.

Be a trustworthy brand when consumers feel vulnerable

Providing products that are safe to consume and therefore trustworthy is the top expectation consumers have of food and beverage brands*. It’s therefore important that brand reflect this in their communications – brands need to be thoughtful, trustworthy and supportive towards consumers during a time when they are feeling quite vulnerable.

The decision to stay at home more has naturally led to more transactions for home cooking foods such as seasoning sauces, meal preparation ingredients and canned foods.

There are indications of panic buying in some particular areas. Toilet tissue, feminine protection and toothpaste have all seen higher transaction growth than usual – this reflects just how vulnerable consumers feel right now and the sensitivity of the situation.

However, there is a more thoughtful and light-hearted theme as certain categories are bought more to reflect more time spent at home – for example prawn crackers, ice cream, ready-to-drink coffee and carbonated soft drinks have all seen double-digit transaction growth in the last month in certain regions.

There is no doubt it’s been an exceptionally difficult start to the year for many businesses and it will only get harder as the crisis prolongs and the uncertainty remains. But there are clear actions which businesses can take to navigate the uncertainty, provide leadership and support to consumers, and ultimately earn their trust. As long as we act responsibly, ethically and with integrity, consumers have proven they look to brands which they trust.

The uncertainty brought by COVID-19 has highlighted how important it is to make decisions quickly. The situation is changing people's lives and its effects on the economy are already being felt across different sectors. In Thailand the situation has slowly escalated through January – February and is now beginning to see a surge in transmissions in March similar to countries around the world.  For marketers this poses a number of challenges and our February update looks in to a number of these key questions:

• What is the new business as usual?
• With changing consumer behaviour, what will stick long term and how can brands adapt?
• How can you promote your brand without being seen to take advantage of the situation?

Download the documents through the button at the right of this page and get in touch with our experts if you would like to have more information.

Notes to editors

*Kantar, Insight Division, Online survey 3,000 respondents 18-60 years old (Singapore, Indonesia, Philippines, Korea, Japan and Thailand).

Shopping behaviour information derived from Kantar, Worldpanel Division’s nationally representative sample of 4,000 households continually tracking Take Home grocery purchases.

Kantar Worldpanel believes the current epidemic will ride on the health and high-quality lifestyle trends and further influence consumers’ choices and behaviour in three ways: category expansion, product upgrade, and new usage occasion. In terms of category expansion, those focused on removing germs and health such as antiseptic wipes and disinfectant liquid are most likely to be impacted. In terms of product upgrade, traditional antibacterial products will become multi-functional by adding qualities such as “natural”, “gentle” and “purifying”. In terms of new usage occasions, products designed for specific (as opposed to general) needs will become popular, as consumers are leading a more sophisticated life.  

According to Kantar Worldpanel’s household panel, sales of household cleaning categories soared against the overall FMCG market trend under the double impact of Chinese New Year and the outbreak of the epidemic. This was due to both more buyers and more frequency of use. The surge in demand was strongest for disinfectants, toilet cleansers and air fresheners.  While consumers usually wait until they have run out of products or stock up during an epidemic, this time they are purchasing more types of cleaning products for different usage occasions.

There is a lot of room for growth for disinfectant liquid in particular as only  28% of Chinese households purchased it in the past year. In addition, latest data from Kantar Worldpanel shows that disinfectant penetration grows with economic development of a household. Coupled with the continuing development of Chinese economy, this is an opportunity to raise public awareness on health and hygiene. It seems very likely therefore that antibacterial and disinfectant products will continue to grow in the long run. In terms of brands, young families are showing a preference for multi-functional and relatively more gentle disinfectant liquid products from Dettol over the more traditional 84 Disinfectant Liquid preferred by older families.  Manufacturers can more actively engage with young consumers through various online/ mobile platforms to educate them on the need for and benefit of using disinfectants in regular cleaning.

In addition to the disinfectant category, the sanitiser segment in the laundry detergent category is also performing well. Many products are taking on the sanitiser+? benefit positioning and actively communicating their differentiation/superiority in gentleness and functional efficacy. For example, LIBY Tea Seed Degerm series and OMO Natural Enzyme Degerm Anti-mite series claim "natural" + "degerm" benefits. These two variants have so far achieved high growth in the fiercely competitive laundry detergent market on the back of winning with families who have children.  Initially given a boost by the epidemic, the benefit of products that remove germs are likely to continue to grow, especially with the increase in households with kids (both young and teens) resulting from the two-child policy implemented in 2015.

Until the epidemic, the low penetration of disinfectants and other degerm products in China show that they had not been regarded as necessities.  However as people are becoming more acutely aware of the benefits of hygiene and health care it is likely use of such products will become routine even after the epidemic has passed.

Howard Chang, managing director Thailand and Malaysia at Worldpanel Division, Kantar said: “Thai culture is unique in the way that it is centred around the key pillars of caring for others, being kind and merciful. This means that they accept personal responsibility for environmental issues. The research revealed that nearly a third (31%) of Thai consumers believe they themselves are responsible to act. This is significantly higher than the global average of 19%.”

Recognising the problem however is only the start: our study shows that only 12% of Thais are “Eco-Doers”. These people claim to be actively taking plastic reduction actions, for example by using their own fabric bags for shopping or using refillable drinks bottles. The results demonstrate that though consumer sentiment is strong, it has yet to filter into changing grocery shopping habits and product choices. Eco-Doers actually spend more on a range of products that have high levels of plastic packaging.     

Thai people expect a contribution from all parts of society, Kantar’s study shows that 35% of consumers expect manufacturers to take the lead, saying they have the most responsibility to act on this issue.

There have already been some official steps taken to address the issue of plastic waste. This includes the government-led 2018 Plastic Ban Road map and industry-led action including retailers joining together to say “Everyday say no to plastic bags” from 1^st January 2020.

Howard Chang continued: “Consumers have high expectations of the business community, but the individual responsibility among Thais is so strong, it is not just a case of ‘you do it for me’. Consumers want companies and the government to provide support to them – the knowledge and infrastructure to make a sustainable contribution themselves.”

The attitude of Thai people to the environment is very positive and their sense of personal responsibility will help them to make their good intentions a reality. There is clearly a strong opportunity for brands and retailers to take the lead in supporting them to achieve this and grow their own businesses at the same time.

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Notes to editor:

The data and insights come from a recent study of 1,200 Thai consumers by Kantar.

News reports around coronavirus in February saw consumers take steps to ward off colds and flu, though the impact in Ireland was less pronounced than it was in Britain. Hand wash products, including sanitisers, grew by 15% in the 12 weeks to 23 February – representing strong, but not dramatic, growth. Charlotte Scott explains: “We’d expect to see more of an impact towards the end of February and into March, as increased awareness of the virus will likely lead to an uplift in sales of healthcare products. This coupled with the impact of Storm Jorge in late February may well lead to growing sales of goods typically associated with stockpiling like pasta and tinned or frozen food.” 

Meanwhile, retailers capitalised on the most romantic day of the year, which provided a welcome boost for grocers. Charlotte Scott, consumer insight director at Kantar, comments: “Sales of chocolates and gifts were up by 13% over the four weeks to 23 February, while other traditional Valentine’s day categories – like wine and chilled ready meals – grew by 6%.  Sweethearts were savvy with their money and sales of products on deal doubled compared to the same period last year.”

Dunnes, Tesco and SuperValu all contributed to the boost in promotional activity, increasing sales of boxed chocolates on offer by 23%, 22% and 18% respectively.

Lidl remained the fastest growing retailer this period, increasing its market share by 0.5 percentage points to 11.5%. The grocer benefited from shoppers maintaining healthy habits, with fruit sales rising by an additional €2.3m.

Aldi was hot on Lidl’s heels, enjoying marginally slower growth than last period at 5.3%. The retailer continued to gain share as shoppers chose to put more in baskets, with one in every two customers adding an additional item compared to the same 12 weeks last year.

Supervalu weathered a slowdown in growth, managing to increase its market share to 21.4%.  It benefited from a wider market uplift in organic food sales of 12%, as the number of baskets across all retailers containing organic goods rose by 9% year on year.

Charlotte Scott comments: “SuperValu has performed particularly well in the organic foods category, and now holds 25% of the total organic market. Fruit sales have grown by an additional €3.1m in SuperValu over the 12 weeks, a key everyday category which has likely helped to drive the retailers’ success in securing bigger baskets. The grocer also saw a bounce in dairy sales, with butter, cream and eggs all achieving double digit growth of 12%, 16% and 15% respectively.” 

Tesco accelerated its growth rate to 0.7% this period and held its position as the second largest retailer in Ireland. Shoppers visited the store more frequently, with trips rising 2.5%, and filling baskets in particular with convenience goods. Prepared fruit and vegetables, as well as ready meals, were standout categories for the business, up by 19% and 3% respectively.

Meanwhile, Dunnes was the only other retailer to accelerate its growth rate along with Tesco.  The grocer gained 0.5 percentage share points, taking it to a 23.5% market share. Performance was led by success in key staple categories, with sales of fresh produce up 3% and an uptick of 12% in bread sales. 

The analysis was based on actual consumer purchase data in the fast-moving consumer goods (FMCG) categories of 5,000 household Worldpanel panelists in 2009 and 2015.

The swine flu crisis in June 2009 led to a significant increase in red ginseng which grew by 57% in the six months following the outbreak, with a particular surge from new consumers.

In contrast, the 2015 MERS outbreak led to an increase in vitamins and health food other than red ginseng, with an increase of 26% in the 12 months that followed. Red ginseng didn’t grow as much, but did still achieve an 8% increase in purchases.

As public interest broadened to other products, consumers became more engaged in a wider range of health food categories and educated themselves on various immune boosters.

In 2017, two years after the MERS epidemic, red ginseng accounted for 35% of total spend in the health food category, with its share slipping to 31% in 2019. During the same period, probiotics’ share increased from 11% to 15%, quickly establishing itself as a key segment in the health food market. Red ginseng still has the highest penetration at 43%, but probiotics has been rapidly gaining ground, with penetration jumping from 24.4% in 2017 to 39.8% in 2019. South Korea’s health food market as a whole expanded about 11% between 2017 and 2019, with penetration reaching nearly 80% of the population.

In terms of where they buy, consumers are shifting rapidly from delivery and agency stores to online. The internet is now the most important channel, responsible for 43% of all purchase occasions in the health food market.

It is still early to be able to show the effects of the novel coronavirus outbreak in 2020 o this market, but it is again well poised for sharp growth. Regardless of this, the maturity of the health food market means consumers are now better informed to pick and choose products with certain functions and attributes that meet their specific needs. In line with the overall trend toward personalized consumption, more buyers are expected to make highly individualistic choices when making health food purchases.

“Korea’s health food market in 2020 is projected to grow a conservative 5% to 9%, when excluding external factors like diseases,” said Kim Ji-Won, Client director at Worldpanel Division, Kantar. “To attract the ever-fickle customers, marketers need to go beyond the traditional function-focused communication approach and look to FMCG and other categories for benchmarking ideas. Each brand should be backed by a suite of different formulations, channels and functional needs, with the brand’s business and marketing strategy mapped out according to its unique market position and capabilities.”

Regardless of the external factor such as outbreaks, it is clear that the educated consumer is very interested in health and functional foods so the category is well placed for growth in the future.

Kantar, the world’s leading data, insights and consulting company today revealed:

• Netflix secured 23% of new Video on Demand subscriptions in the 3 months to October 2019, closely followed by Hulu with 20% share.
• 56% of new VoD subscriptions were ‘stacked’ 2^nd or 3^rd subscriptions,
• 30% were 1^st time subscribers – of whom 31% chose Netflix as their first streaming experience.
• Netflix is tied in first place with HBO Now for customer advocacy. A key stat for retention and growth.
• Subscription fatigue hasn’t kicked in yet, with average consumers holding almost 4 video subscriptions and less than two audio subscriptions.
• Binge watching is a mainstream viewing habit.

These are some of the initial findings from Kantar’s new Entertainment On Demand service launching today in the USA. Entertainment On Demand is the newest offering from Kantar. The service is designed to help the broadcast industry and investors understand the full consumer journey for digital video and music subscription services. Based on a longitudinal panel of 20,000 consumers and boosted by 10,000 consumer interviews each quarter, including at least 2,500 new subscriber interviews.

Kantar Entertainment On Demand is delivered by the same team that provides the world’s leading mobile phone manufacturers with global mobile phone purchasing and usage trends. Entertainment On Demand is the only subscription service providing both quarterly installed base and new subscription market share alongside deep analysis on purchase motivations, including named content, customer experience, and diagnostics on ‘at-risk subscribers’ as well as guidance on acquisition and retention strategies.

Entertainment On Demand provides fast, sophisticated and accurate research into behaviors like purchase triggers, post-purchase usage, loyalty and the customer experience, providing clients with a deep understanding of the reasons behind consumer subscription choice. Organizations will be able to use the service to help maximize their subscription sales, increase customer retention rates and refine their marketing strategies. Initially launching in the US in March 2020, Kantar Entertainment On Demand will also be available in the UK, Germany, Australia and Japan in the second half of the year.

 Additional findings from the first quarter’s video subscription behaviours in the US reveal:

• Amazon Video ranked third in new subscriptions followed by HBO in a distant 4^th with 6% share of new subscriptions.  
• Netflix is king of the ‘gateway subscription’ with 31% share of first-time subscribers. 43% of new Netflix subscribers were signing up to their first video subscription service. Followed by HBO Now, for whom 32% of new subscriptions were first-time subscribers.
• Hulu leads the market in ‘Stacked Subscriptions with 67% of new Hulu subscribers already subscribing to another service.
• HBO Now and Netflix are tied for customer advocacy levels at a very impressive NPS of +63. Amazon Prime Video and Hulu are 10 points lower.
• Hulu leads on ‘binge watching’ with 86% of their subscribers identifying it as important, followed closely by HBO Now.
• Subscription Fatigue is not yet a major phenomenon in the industry. Overall 4% of new subscriptions were accompanied by the cancellation of another subscription. 6% of subscribers picking up Amazon Prime said they had simultaneously cancelled another service. There is already a significant groundswell – with 52 already saying there are too many subscription services.
• With a net satisfaction of just +8% in ‘Value for Money’ – significantly lagging other subscription services - HBO Now may face future challenges in subscriber retention despite its overall strength in customer satisfaction.    
• Amazon Prime leads the pack in net satisfaction with the variety of TV series and Films while HBO has a marginal lead over Netflix on satisfaction related to original content.
• Free trials and new smart TV purchases are the primary trigger for new subscriptions.
• Netflix is winning the interface war, leading in ease of being able to pick up films/tv where left off, search functionality and suggestions of what to watch.

Dominic Sunnebo, Senior Vice President at Kantar, Worldpanel Division, comments “As we observed in our 2020 Media predictions, the streaming wars are heating up. Entertainment On Demand provides subscription services and investors in the media industry with a new level of insight in to the motivations and habits of subscription service users. At Kantar we are focused on helping providers grow their subscriber base by driving new customer acquisition and improving customer retention by fine tuning the customer experience. Understanding key drivers behind digital behavioural patterns is vital for clients to understand what digitally focussed consumers want, think and do. He continues, “From our US research we can see that with the explosion in the number of digital subscription options available, the customer journey for different digital services is increasingly differentiated.”

Read Cundiff, North American CEO at Kantar, added “Kantar is the industry standard for understanding and tracking global Smartphone behavior and is the currency for the TV viewing habits in more than 60 countries around the world, as well as being the leading global source of ad spend. This new service expands our expertise in to the subscription market, and will help, major players, market entrants and investors understand the ‘why’ behind the ‘buy’ decision subscribers are making. The launch of this service reflects the rapid expansion in the digital subscription market as well as the changing needs of our existing clients who are expanding from hardware further into service provision.”

Note to editors

The full quarterly data set will be based on a nationally representative panel of 20,000 consumers and boosted by an additional quarterly survey of 10,000 consumers including 2,500 consumers who have signed up a new service in the past quarter. All data points for the three months to October 2019 are based on pilot survey 2,500 people including 500 new service subscribers.

Kantar, the world’s leading data, insights and consulting company today revealed:

• Spotify secured 29% of new audio streaming subscriptions in the 3 months to October 2019.
• Pandora is the USA’s clear #2 service with 18% share followed by Amazon Music with 12% and Apple Music on 11% share.
• 61% of subscriptions in the quarter were first-time subscribers, 20% were second or more subscriptions
• 11% of subscriptions in the quarter were ‘switcher’ subscriptions where an existing subscription was cancelled to fund the new subscription – far ahead of 4% switching seen in video streaming market.
• Spotify lead amongst major players in customer advocacy with a Net Promoter Score (NPS) of +54. Unlike its video service, Amazon Music has the lowest NPS of the tier-1 services with an NPS of +28.

According to Kantar Worldpanel’s beauty panel, prior to the outbreak of Covid-19, the overall traffic of personal care sector has been relatively stable. During the year, March, mid-year, and the end of the year usually gain the most obvious traffic growth driven by promotion activities from online retailers. 

Among all the subcategories, skin care has won the most traffic, while color cosmetics has gained the biggest year on year growth up to January 24th 2020.

How will personal care and beauty categories perform after the outbreak of Covid-19? 

We have the following predictions:

1. Short-term influence on hair care

During SARS outbreak in 2003 there was no official quarantine policy from government so most consumers still maintained their regular pace of daily work and life, but when they came back home, they cared more about their daily personal care routine. This boosted certain cleansing categories such as hair shampoo and body wash.

But during the recent epidemic situation of Covid-19, under the strict (semi) quarantine suggestions and policy, consumers have been staying at home for most of the time (even as long as 14 days) without going out and working from home has been widely accepted by many companies.

In this unique scenario consumers have decreased their hair washing frequency and "no hair wash" has been a popular hash tag in social media. For example, in Sina Weibo, the topic of “number of days without a hair wash” has over 65,000 discussions and over 379 million page views. 

We can foresee that in a short period, the related categories, such as hair shampoo, conditioner, will see a drop in purchasing. But in the medium to long term, with the relief of epidemic situation and people returning to work the hair care category will soon start to pick up.

2. Big impact on color cosmetics and fragrance

While consumers are still using body wash and hair shampoo at some frequency, color cosmetics seems to be less relevant as most females are staying-indoors and the biggest influence should appear in the two weeks after China Lunar New year. 

We estimate that during the current outbreak or even some time after the outbreak finishes, the recovery of color cosmetics will be relatively slow as the protection on face will last for some time.

In spite of the huge impact, there are some encouraging signals when you consider the new life style and work style among young generations. 

The increasing popularity of video conferencing, video dating, selfies and livestreaming on Social networks mean many young consumers will still wear makeup, and some sophisticated females even invented "face mask makeup styles" which focus more on eye makeup. In Sina Weibo, "the must-haves for face mask makeup" topic has gained more than 14,000 discussions and over 8.9 million page views up to February 20th.

For fragrance, due to less socializing out of the home during the epidemic outbreak combined with the increased usage of disinfectant fluid /spray, the number of fragrance usage occasions will reduce significantly.

3. Rising awareness for body cleansing, skin care will also win more attention

Led by hand wash / sanitizer, body cleansing is surely a hero category during the epidemic outbreak. In addition, due to long periods of staying at home, the lack of exercise, and the wearing of face masks, the facial skin status will also be influenced including the problem as skin dullness, roughness due to friction, sensitivity, which will need more care. And with the increasing frequency of washing hands, there will be an increased need for hand cream. 

These factors will drive the rebound of the skin care category, especially those products with the benefits of keeping skin healthy

4. The next rising star: Environment friendly products

According to a survey on sustainability by Kantar Worldpanel in 2019, more than half of Chinese consumers pay close attention on "sustainability", which is mainly out of their concern on health. 

As the outbreak of Covid-19 is somewhat considered as the revenge from the nature, in the future, we expect consumers will show more care towards Mother Nature. This alongside the continuing education from media and brands abut sustainability means that products with environmental friendly elements will gain more preference among consumers which will likely inspire the beauty industry to integrate sustainability into brand strategy, and focus more on products with "nature" and "healthy" concepts.

Though we predict that personal care and beauty categories will be impacted greatly during the epidemic outbreak, with the increasing of health awareness among consumers, and the recovery of normal daily life and going-out frequency, different categories will start to pick up at different times.

It’s estimated that hair care will bounce back relatively quick, and then skin care; while for color cosmetics, it might take some time until consumers feel it is safe to remove their face mask.

Kantar Worldpanel will closely monitor the impact on personal care and beauty categories from Covid-19 outbreak in the first half year of 2020, and provide up-to-date information on how these categories are starting to pick up.

Sainsbury’s was the only one of the traditional large grocers to increase year-on-year sales, with spend up by 0.3% as it returned to growth for the first time since October 2019. Fraser McKevitt, head of retail and consumer insight at Kantar, says: “Sainsbury’s has performed well this period despite a challenging market, growing sales in its Sainsbury’s Local convenience stores as well as online. It’s worth noting, however, that continued pressure from the discount retailers meant the retailer still lost market share this month.”

Among the rest of the big four, sales at Tesco and Asda dipped by 0.8% and 1.2% respectively.  Meanwhile, Morrisons sales were 2.0% lower than the same period last year, and as a result its market share fell from 10.4% to 10.2%.

Across the market, recent news reports around coronavirus saw consumers take steps to ward off colds and flu, accelerating sales of hygiene and health products. Fraser McKevitt explains: “Given the media focus around the outbreak of COVID-19 in February, it’s unsurprising to see shoppers prudently protecting themselves from illness. Sales of hand sanitiser increased by 255% in February. Meanwhile, other kinds of liquid soaps saw sales increase by 7%, and 10% more was spent on household cleaners.”

Such concerns didn’t stop the British public getting close to their loved ones at the most romantic time of year, as some 45% of consumers celebrated Valentine’s Day on 14 February*. Chocolates were the most popular gift, given by almost a third of those taking part, while 22% of participants chose to give flowers to their valentine and 12% gifted alcohol.

Lidl was the main beneficiary, increasing sales of Valentine’s categories – including chilled ready meals, desserts, sparkling wine and boxed chocolates – by 17%. The discounter also took the crown as Britain’s fastest-growing grocer for the first time since November 2017, with sales up by 11.4%. Fraser McKevitt comments: “Lidl has been benefiting from its store expansion programme for a number of years, hitting a landmark in February by opening its 800^th British store. The new locations have helped to bring in nearly 900,000 additional shoppers to the supermarket this period, and its proportion of market sales has increased from 5.2% last year to 5.8%.”

Meanwhile, Aldi’s sales were up by 5.7%, with its share of the market now standing at 7.9%. The retailer was particularly strong in both alcohol, up by 7%, and chilled convenience items – such as dips and prepared salads – which grew by 8%.

This year Waitrose has ramped up preparations to take full control of its own online distribution as its partnership with Ocado comes to an end in September.  Key to its success will be translating its premium brand to the online experience. Fraser McKevitt continues: “Waitrose currently only commands 5.1% of the market, with sales declining by 1.3%, but is the market leader in shopper satisfaction**. Nearly four times more people report a good experience shopping with Waitrose than a negative one. Satisfaction with in-store staff is particularly high, and capturing that trademark service will be crucial as it grows its online platform this year.”

Co-op shoppers on average made one additional trip to the grocer over the past 12 weeks, in contrast to the overall market where frequency fell. The convenience retailer saw sales grow by 2.5% year on year, and its market share grew to 6.0%.     

Elsewhere Ocado continued its double digit growth at 10.8%, while Iceland’s sales increased by 1.7% and its market share remained flat at 2.2%. 

* Valentine’s Day findings based on the responses of 66,987 adults (aged 18+) in Great Britain asked how they celebrated Valentine’s Day. The survey was conducted by Worldpanel Plus between 21 February and 28 February 2020.

** Findings based on continuous Kantar Shopper Satisfaction study. More than 50,000 trip reviews submitted by shoppers each week covering all UK retailers. Study was conducted by Worldpanel Plus over the 12 weeks to 23 February 2020.

Kantar, the world’s leading data, insights and consulting company, announces today the introduction of their three new sales and marketing tools built on Artificial Intelligence / Machine Learning (AI/ML) algorithms and workflows developed in Kantar’s Brand Growth Lab in Singapore. The Lab, an advanced analytics hub, is dedicated to discovering new ways to leverage big data to drive strategic decision-making for business. The three new solutions are all designed to help Consumer Packaged Goods (CPG) brands find sustainable growth in South East Asia. The Solutions are:

• Kantar Brand Growth Accelerator:  an engine for inquiry to discover growth opportunities and facilitate organizations alignment to monetize them.

• Kantar Demand Forecasting Simulator is a demand forecasting tool integrating multiple data sources and building multi-variate models using advanced algorithms to better estimate future demand.

• Kantar Promotions Simulator is a new methodology for modelling CRM effectiveness, helping to understand which touchpoints and mechanics deliver sales, including which combinations of offerings will provide the biggest sales uplift.

“The demand for household paper increased significantly during the SARS outbreak. Consumers were willing to choose higher quality, more expensive products." 

According to the data during the SARS period in 2003, the increased time consumers spent at home would inevitably drive a significant increase in demand for household necessities. Household paper products also benefited from this. The growth rate of paper products in the 2nd quarter, the period most affected by SARS, was higher compared to the other quarters, especially for facial tissue.

Meanwhile, during the epidemic, consumers were willing to choose higher quality products at a higher price due to safety and health considerations. We found that the price index of facial tissue purchased by consumers during the epidemic outbreak was 15% higher than the average for the whole year.

“Impact of Covid-19 on the future household paper market in 2020”

Since 2003, the consumption of household paper products in China has seen significant development both in terms of quantity and quality. Furthermore, compared to 17 years ago, the consumer perceptions and the category structure was very different. We believed that the household paper category in the epidemic and post-epidemic era will usher in new opportunities.

In the short term, the Covid-19 epidemic in 2020 will result in a strong demand for paper products, especially for the wet tissue products with the functions of disinfection and speed clean sterilization. In addition, as consumers have spent more time on cooking and eating at home, kitchen towel and wet tissues will also perform well.

New usage occasions for the category have also arisen as a result of the epidemic; for example, placing a disposable tissue in the office/residential elevator to ensure the hygiene of the elevator buttons. In Hong Kong some savvy consumers also use tissue to make reusable masks (though this could not extend the lifespan of mask).

In the long term, we predict the following trends in the household paper category:

1. With the improvement of national health awareness, health, environmental protection and the pursuit of safety, food-grade paper products will become more and more popular and consumers are more willing to pay for better quality products. Antiseptic wet tissue will see rapid growth and unbleached tissue, with no bleach and free additive as the main selling points, will continue to perform well.

Brands can launch higher-quality products and communicate with the interest of health, environmental protection and safety to meet the upgraded needs of consumers.

2. As consumers’ lives become more refined and sophisticated, their demand for different scenarios of household paper will be higher and higher. They will use kitchen towel in the kitchen; use wet toilet tissue in the bathroom, take mini-tissue and antiseptic wipes to go out; use soft-pack tissue for office desk or home table, use cotton towels for beauty care or makeup.

Brand owners could communicate and interact with consumers by connecting with different usage scenarios and drive the rapid development of new market segments.

3. Consumers are more likely to choose comprehensive e-commerce and offline retail channels supported by O2O to purchase household paper. In 2019, before the epidemic, the new Omni-channel retail mode “Wu-Mart+Dmall” enabled Wu-Mart’s O2O delivery proportion to reach 13.8% value share of the business, far exceeding the 5.5% share for the overall modern trade channel, which also helped its household paper category to achieve a rapid growth of 8% under the stagnant environment of modern trade.

During this epidemic, driven by the convenience, consumers are more likely to choose shopping in community supermarkets/CVS, O2O platforms and integrated e-commerce platforms. It is believed that in the post-epidemic era, household paper will become a necessity on the O2O platforms, and increasing the investment on these mobile APPs to enhance brand exposure and offer more usage tips can gain a winning advantage.

4. Key players in the market will further differentiate their brands from the competition, and the concentration of top mega brands may be strengthened. In 2019, the top four groups (Vinda, Hengan, Gold Hongye, Guangdong Zhongshun Group) in household paper category, together account for about 51% of the market, and the other 49% was occupied by regional brands and local brands.

After this epidemic, the consumption tendency of some mass consumers may become more rational and they will consider to purchase lower cost products again. Meanwhile, middle-class consumers would be more willing to purchase products that can satisfy the requirements of healthy life quality, and the demand of some subcategories will develop rapidly, thus accelerating the premiumisation trend.

This change in behaviour may eliminate a number of weak small brands in the market if they are not quick enough to adapt to the changing consumer needs. Mega brands, however, which can rely on abundant production lines and superior marketing resources may see a greater benefit if they have a well-balanced portfolio which fits with well within the new environment.

The development of 5G is very important because this speed of connection is needed to properly bring the Internet of Things to life. In theory at least, it offers the opportunity for anything and everything to be connected and brings the dream of technology such as autonomous vehicles and smart cities a significant step closer to reality. It will mean reliable streaming without a Wi-Fi network with an estimated download time of 4-40 seconds for a high definition film. The impact on business and ultimately people’s lives will be significant, not just communications and access to entertainment, but more significantly with things like telemedicine and virtual spaces.

A recent piece of Kantar’s Worldpanel ComTech research across the EU5 revealed that there is still quite a piece of education to do with the general public about what 5G is and the possibilities that it will offer to them. As of Q2 2019, only just over half the population really knew about 5G - 9% of consumers claimed to know a lot and 44% had a little knowledge of it. In contrast, 12% had not heard of 5G at all and 36% had heard the term but knew nothing about it. If networks and handset producers are using 5G as a selling point, which of course they are, part of their task looks to be explaining and demonstrating the benefits to the majority of the population.

What is interesting though, is that lack of knowledge and understanding isn’t necessarily a deterrant to purchasing a 5G device. A total of 60% of consumers had an intention to buy one, of this 16% were a definite and 44% said that they probably would. Perhaps unsurprisingly these consumers demonstrated a high interest in technology, film and TV.

Attracting consumers to purchase a 5G handset is potentially very lucrative as 20% of those intending to purchase a 5G device were intending to spend over €750. Of those intending to purchase a device, 57% were male. Those who did intend to buy a 5G device were mainly users of Apple (6-X), Samsung Galaxy (S8, S9 and A5) and Huawei P8 Lite 2017.

Nearly a quarter, 23%, of those intending to purchase are currently Apple owners, which presents both an opportunity and a threat to the brand. At the moment, Apple do not have a 5G offer, so on the one hand there is clearly the demand for them to bring one to market in the near future. On the other though, there is the possibility that this could be an opportunity for other brands which do offer 5G to cannibalise Apple’s market share.

Those who already owned a 5G device rated the processor (quality/speed), screen clarity, storage capacity and battery life as the key features that were important to them. Size of screen and quality of camera were also key drivers.

All figures quoted come from Kantar’s Worldpanel ComTech panel for the year to Q4 2019 across the EU5 unless otherwise stated.

In an earlier report analysing the impact to the FMCG market by SARS last week, Kantar Worldpanel already shared key findings based on historical data from 17 years ago. However, as many analysts suggested, the scale and scope of the Chinese economy in 2003 was substantially behind the level in 2020, and therefore the impact of COVID-19 is believed to be much stronger than the impact of SARS.This impact will definitely be felt by the FMCG market but not all categories and retailers will see a negative impact.

Chinese New Year (CNY) is one of the most important sales peaks for many brands and retailers.The date of Chinese New Year is not exactly the same every year so we have realigned the reporting period based on lunar calendar to make the data comparable. Since Chinese New Year in 2019 was one week later than 2020, we re-adjusted the data period by week and after comparing consumers purchases two weeks before CNY and two weeks after Chinese New Year, we are now in a position to assess the impact.

 1. Pre-CNY Sales Stronger Yet Considerable Decline Observed After the Virus Outbreak

The total sales two weeks before CNY grew by 15%, substantially higher than the full year FMCG growth rate of 5.3% in 2019. However, after the Wuhan lockdown was announced on January 23rd, panic started to gather. As the Chinese government appealed to everyone to avoid family and friends gatherings and all social activities (including the suspension of cinemas and entertainment facilities across major cities), the sales of the CNY week dropped by 24% on a like-for-like basis and then by 41% in the subsequent week, as people were asked to stay at home. Based on our preliminary estimation, total FMCG sales went down by 12% over the 4 weeks period compared with 2019. 

The drop of FMCG market was partly due to the decline of shoppers by 2%, but more severely impacted by the drop of spend per trip by 10% as shoppers reduced number of categories they purchased. There are two main reasons behind the changes: consumers reduced their new year celebration gathering, hence there was a lower demand of categories that were normally purchased for CNY gifts. In the meantime, consumers had to relocate their budget to critical health and protective categories, i.e. face masks, disinfectant products and fresh foods.

2. Mixed Performance by Categories Amid the Epidemic

The sharp drop of consumer spend is a bad news to many categories, especially those relying heavily on CNY sales. Both alcoholic and non-alcoholic drinks saw their sales fall by more than 40% during the 2 weeks after CNY as most consumers cancelled their family gathering. In China, top choices for gifting occasions include liquid milk, confectionary and biscuits, all of which faced considerable challenges during CNY this year. On the contrary, categories like instant noodles, frozen foods and quick soup witnessed soaring demand as consumers flocked to supermarkets to stock up and spend more time cooking at home. Moreover, seasoning products, butter and cheese also enjoyed significant growth as consumers opted to cook more indulgent meals at home.

Non-food categories are typically less seasonal during the CNY period, however some of them were experiencing astonishing growth as anxious shoppers, desperate to protect themselves from infection, have stripped stores of hand sanitisers and disinfectants. Meanwhile, tissues and wipes gained more popularity as they were used for hand cleansing when consumers are out of home. Those categories are expected to maintain their growth momentum even in the post-epidemic era as Chinese consumers continue their sanitising habits.

“When did you wash your hair last time?” this is a top topic on social media during the period. As consumers stayed at home every day, their personal care routine tended to change. The sales of haircare products, including shampoo and conditioner, saw decline and the situation is even worse for colorant and styling products. Due to the fact people were not going out to meet friends or to the office, categories with strong social functions such as make up and fragrance also experienced disappointing sales.

3. Offline Stores saw Considerable Shopper Loss while Small Formats and Digital Commerce Enjoyed Growth

Hypermarkets and Supermarkets all faced severe challenges of reduced footfall during the Covid-19 spread, with penetration dropping by 15% and 12% respectively.   During the festive period, gifting occasions also dropped significantly, with categories relying on nice gift packs for family/friend visits being hit particularly hard. As many consumers cancelled their overseas travel plans, purchases from other countries and duty free also saw a significant drop.

The epidemic did bring more demand to a handful of other retail channels. Small supermarkets, mainly those located in residential communities, reported strong growth during the CNY period, as they were closer to shoppers and stocked essential fresh foods and daily necessities. Ecommerce giant like Alibaba, JD and Pinduoduo, are also adapting their strategy proactively in terms of logistics and home delivery. Moreover, emerging channels riding on the popularity of Wechat enjoyed soaring demand as consumers spent far more time on social media for news and entertainment during this period.

New retail players, led by Hema, recorded stronger growth during CNY period, thanks to more shoppers and more visits as consumers opted to use delivery for their daily foods. With rapid store expansion, Hema almost doubled its footprint compared to CNY in 2019. Meanwhile, it’s the first retailer to accept redundant workers from restaurants and catering services as part-time workers for sorting and delivering merchandise. The move is a win-win solution for both industries to survive through this difficult period. Innovative solutions such as ‘contactless delivery’ was also invented to avoid physical contact between shoppers and delivery workers. Omni-channel penetration with O2O delivery is expected to be more accepted post the crisis.

The battle against COVID-19 is still on and the challenges to FMCG industry is yet to be fully observed. The wide spread epidemic will have a profound impact on FMCG categories in Q1 and possibly in Q2. Kantar Worldpanel will launch a monthly category tracker to help brands and retailers closely monitor the impact.

The end of hyperconsumption, a real turning point in 2018, has now taken root with everyone in 2019. French people now know that by eating less they will be more healthy and reduce waste to protect the planet. Some of the markets most affected by the reduction in volume include: make-up (-5%), alcohol (-6.4%), meat (-4%), frozen goods (-3.3%) and baby hygiene (-7.5%).

Impacts of the Egalim law
Egalim law, which is essentially about protecting the food price for farmers, saw its first application in 2019.  It has had a negative impact on food purchases (six fewer promotional items purchased per household*) and expenditure on promotional products, which fell by 6%*. The share of turnover from promotional products is now only 13.7%*, i.e. -1.1 points compared with 2018.  

With purchasing power increasing, more and more meals are eaten away from home (+8.5%), in new eating places, which have developed considerably. What is more, 29% of French households now have meals delivered, which represents another source of competition for the traditional channels. 

Rising expenditure

Household expenditure continues to rise, but at a very slow rate with a 2% increase in total FMCG across all channels. Households are choosing more expensive products and prioritising quality over price: 69% are willing to pay more for higher quality products.

But the return of inflation seems to have slowed the food transition somewhat. Although inflation due to the Egalim effect remains contained, it has nevertheless doubled since 2018. Some French people are now using EDMP (predominantly own-brand - formerly discount) stores, chiefly Lidl, which has gained 0.4% market share - the highest gain along with Leclerc.

Source: Kantar – Worldpanel - FMCG/Self-Service Fresh Products/100% Total general goods stores (Hypermarkets+Supermarkets+EDMP+Online+Local) - Calendar Years except for Moving Annual Total at the end of November 2019

Egalim also benefits private labels, which have been helped by the promotional slowdown on brands but this isn’t the only reason they are recovering after 10 years of decline. The stores have put their own brands back at the heart of their commercial strategy, focusing on the quality of their products and focusing on popular consumer drivers. These drivers include organic, local, showcasing ‘Made in France’ labels, removing suspect ingredients, using Nutriscore for some of them, and plant products as a replacement for animal proteins. 

Source: Kantar - Panel Worldpanel

Decline of the “average consumer”

The Gilets jaunes movement, marking a major social divide, has shed light on the fragmentation of French society. Split by level of income, it does not share the same expectations. The emergence of this revolt has also put into glaring focus the famous division between ‘end of the month’ and ‘end of the world’. The end of the “moyennisation” (rise of the middle class) in French society which this has revealed also explains the fragmentation of consumption over the last few years.

 End of the world consumers

On the one hand, we see households that are financially comfortable and sensitive to environmental issues: they are looking for organic products but not promotions and are making their consumption a sometimes militant act by advocating deconsumerism. They frequent organic stores, shop through apps such as Yuka (in 2019, 21% of French households used at least one food or hygiene/beauty application). They are eating less meat (they may be flexitarian {34%} or even vegetarian), purchase their products from short food supply chains, e.g. AMAP (Association Pour le Maintien de l’Agriculture Paysanne - Association for the Protection of Rural Agriculture), in specialised stores like Grand Frais or through collaborative platforms such as La Ruche qui dit oui. More broadly, these consumers are supporters of responsible consumption and local produce through alternative distribution channels. They are turning away from traditional hypermarkets and are concerned about the ‘end of the world’. 

End of the month consumers

On the other hand, we also find less urban and more modest consumers, who face major budgetary constraints and feel frustration at being forced to tighten their belts: in November 2019, 11% of households stated that they “are unable to cope”. However, they want to consume ‘like everyone else’; clearance stores and discount shops such as Action are taking advantage of this situation and have been very successful. One may remember the stampede for the Nutella super price promotions in Intermarché stores in January 2018. These consumers are concerned about the ‘end of the month’.

For mass consumption stakeholders, the challenge lies in this double bind that they must respond to: addressing consumer diversity and opposing lifestyle models, against a background of social crisis.

*cumulative data, January to September 2019 compared with January to September 2018

Methodology

This data came from Worldpanel, a sample of 20,000 Worldpanel households, and is calculated on a ‘General goods stores’ range (Hypermarkets + Supermarkets + Hard Discount + Local + Internet), on a set of Fast-moving Consumer Goods and Self-Service Fresh Products (Food, Liquids, Hygiene/Beauty, Cleaning).

Product range = expenditure of ordinary households on FMCG/Self-Service Fresh Products for consumption at home. This data came from a panel and therefore has a probability value.

Along with the continued economic development and the advancement of new technology, changes continue to happen at a faster rate, bringing both new challenges and new opportunities to the growth in 2020 and beyond.

In Vietnam, traditional trade remains dominant in the fast-moving consumer goods (FMCG) sector, accounting for the greatest proportion of spending but more recently, we have seen the emergence of new types of modern trade competitors in the retail landscape, under new formats that didn’t exist as strongly or at all, five years ago: such as ministores stores, specialised stores, and online shopping.

Interestingly, these three retail formats outstrip the more established channels in driving value spend growth in the past twelve months and in fact 66% of the incremental value spend on the FMCG market comes from these three stores, not the more established channels. Vietnamese shoppers are expanding the number of different channels they visit, when shopping for grocery. On average, an urban shopper now purchases FMCG in about seven different channels, hence, understanding the role that each type of channels plays in each shopping mission for your category or brand becomes more important for winning the game in the long term.

In such a context, finding out the real factors which influence consumer’s attitude and purchase behaviour are priorities more than ever, and successful brands and retailers will be the ones who dig deeper and truly understand how their consumers and shoppers are changing. What is changing? How the new competitors are growing? What is driving this trend? Key themes and more, will be explored further in the fifth edition of our annual Vietnam Insight Handbook.

Get your copy today by clicking the link on the right side of this page and get in touch with our experts to discuss and identify growth opportunities for your brand.

• Spanish consumers bought less than in 2018, but spent more on fresh food products in supermarkets and hypermarkets.
• Mercadona, Lidl and Carrefour led growth among the large retail groups.
• Regional supermarkets and online shopping continue to grow.

In terms of volume, the market shrunk by 0.9%, mainly driven by packaged food, which fell by 1.2%, and increased consumption outside the home.  This is despite the growing number of options for eating in, such as ready meals offered by the large retailers, who significantly expanded their range over the last year.

Shopping baskets shrunk in 2019, although prices rose by 1.9%, with increases across the board in FMCG. The greatest increase in spending occurred in fresh produce, which rose 2%, with spending in modern retail up to 4% higher on these products than the previous year.

Spanish consumers are buying fewer fresh products, moving away from shopping in traditional markets, despite spending more in the sector. This is due to both higher prices for some products like potatoes and onions and increased spending on luxury foods such as Iberian ham, (+ 27.5%), avocados, shrimp, prawns and cephalopods like octopus, all of which gained prominence in Spanish households in 2019.

In packaged foods, organic products are now commonplace in Spanish households due to increasing sophistication among shoppers. Consequently, seven out of 10 Spanish households purchased an organic FMCG product in 2019, spending 15% more on these products than the previous year.

Mercadona, Lidl and Carrefour strengthen

In this context, Mercadona once again managed to strengthen its position in the Spanish market. Spanish consumers spent one in four euros (25.5%) of their FMCG budget with the Spanish retail leader. “The growth in fresh produce, which saw it increase its market share by over one point, clearly explains the chain’s progress in 2019”, notes Florencio García, Retail & Catman sector director at Kantar. Regionally, the chain’s gains in the Basque Country, a market it has just entered, stand out. In 2019 the company also launched ready meals and crossed over into Portugal, where it has gained steady ground in the north of the country, a position it is seeking to consolidate in 2020.

Carrefour’s market share for 2019 was 8.7%, an increase of 0.3 points compared to 2018. This year, it significantly increased its number of stores, especially neighbourhood formats. Together with the online channel, this has strengthened Carrefour’s relationship with Spanish consumers and helped it achieve its best results in recent years. Carrefour still faces challenges in 2020, especially in maintaining the appeal of the hypermarket format in the face of the increasingly local and on-demand shopping options available to the Spanish consumer.

Grupo DIA remains the third most popular Spanish retailer, despite its market share falling 1.1 points to 6.4%. “DIA will undoubtedly be the key to FMCG in Spain in 2020. For now, it remains the third biggest, with the largest number of stores, and is still present in six out of ten Spanish households. While it has the potential to grow from this position, if it continues to lose ground, it will lose its place among the top three and other large retailers will snap up these consumers”, remarks Florencio García.

Lidl is now the fourth biggest supermarket in Spain and saw the highest growth in market share in 2019, with an increase of 0.7 points to 5.6%. In the last five years there has been much talk of Lidl’s growth in Spain. However, this year has seen the greatest increase, making the German group the second most prevalent chain in Spanish households, reaching 68.9%.

The market share of Grupo Eroski fell 0.4 points to 4.9% in 2019. Increased competition in its main regions, including the growth of Mercadona in the Basque Country, Lidl in the north, and the growth of regional chains in Catalonia, which compete directly with Caprabo, have dented Eroski’s figures, despite its strong presence in Galicia and strong leadership of the Basque market at the end of the year.

Auchan (3.5%) occupies the last spot in the Top 6, holding on to its market share and reversing the trend of recent years. Its hypermarkets, many of which are outside city centres, have managed to hold onto their shoppers, and the change from Simply to Mi Alcampo has allowed increased synergy with local options, a factor that should be consolidated in 2020 to allow a return to growth.

Florencio García notes that “FMCG grew as a whole in 2019, from the increased share in fresh food, the section that continues to set the pace in the sector. Consumers have remained demanding when it comes to organic food, environmental and animal welfare standards so the large retailers are now pivoting their strategies toward these issues, a trend that is set to continue in 2020”.

Spanish consumers go local and digital

Regional supermarkets remain in good shape, with a market share of 12.2% (not including Eroski), which makes it the second national retail channel when taken as a whole, with growth of 0.4 points from 2018. Growth has not only been driven by positive perceptions of fresh produce and proximity, these retailers are increasingly gaining ground in all areas, offering more services, allowing continued growth, with examples in practically every region.

E-commerce continues to grow, expanding 0.3 points to reach 1.9% of the FMCG market. While fresh produce continues to hold back the channel’s market share, it has played a fundamental role in spending for sectors like household products and perfume. Despite gaining 4 million new consumers since 2010, the channel is still used sporadically and for frequent shopping.

Florencio García remarks: “Consumers are still increasing their range of sources for shopping and mixing them: one day they will visit the store, the next they will shop online. Some order food for delivery, while others pick up ready meals at the supermarket. Consumers still go to traditional markets, but less and less, instead alternating between the major national chains and other regional ones for their shopping”.

*Regional supermarkets do not include Eroski or El Árbol Supermarkets.
Period: January to September 2019. Data from 9 September 2019.
Source: Kantar (Worldpanel Retail)

CMM already covers traditional media, including TV, as well as Facebook other digital media platforms. The addition of YouTube means the service now tracks approximately 90% of all advertising and 80%¹ of the digital advertising seen by the typical consumer each day. This represents the most complete read of advertising effectiveness in the fast-moving consumer goods (FMCG) industry.

Kantar’s CMM service assesses how an individual’s probability of buying changes after exposure to different influences including advertising. All information is collected with panellists’ explicit permission and in a privacy-safe environment. Working at an individual level, and evaluating each different form of media, Kantar cross-references advertisers’ ad ‘flight’ plans to measure the effectiveness of every £/€/$ spent on each media.

Kerry Corke, Global Media Director at Worldpanel Division, Kantar said: “Accounting for exposures on widely used digital platforms such as YouTube is vital for advertisers who use CMM results to improve the relevance and impact of their communications. Digital advertising has grown significantly in recent years, in some cases overtaking traditional channels in terms of advertising spend. We are constantly adapting our tools to reflect trends and the addition of YouTube is the latest in a continuing stream of planned developments.”

YouTube viewing data is captured through a combination of passive-metering of panellist exposures and dynamic statistical techniques to extrapolate to the appropriate demographic group. All media exposures reported are linked directly with corresponding panellist purchasing behaviour to understand advertising impact on sales and buyer recruitment.

The expanded CMM service is available from today in Argentina, Brazil, France, Indonesia, Portugal, Spain, Taiwan, Thailand, Mexico, UK and Vietnam.

Notes to editors

CMM is available in Argentina, Brazil, Chile, China, Colombia, France, India, Indonesia, Peru, Portugal, South Korea, Spain, Taiwan, Thailand, Mexico, UK and Vietnam. Degrees of digital coverage vary by market.

To find out more Kantar’s wider capabilities in Media including audience measurement and brand tracking visit here.

Packaged food consumed at home continues to see a slowdown in growth, reporting 3.1% in Q4 2019 and 2.5% in 2019. However, categories with health and wellbeing benefits continue to outpace the market. Homecare categories and personal care categories maintained a strong performance, reporting 8% and 11.5% growth respectively in 2019, driven by the desire of younger consumers to upgrade their lifestyles. 

Across all regions and city tiers, the west region and prefecture level cities were up by 6.7% and 5.9% respectively. Modern trade (including hypermarkets, supermarkets, and convenience stores) grew by 1.1%, 1.2 points lower than 2018, with hypermarkets and large supermarkets driving the slowdown in growth. E-commerce continued to record a staggering 36.2% growth in FMCG, with 78% of Chinese urban families purchasing FMCG online at least once over the year with an average frequency of 14.5 times in past one year.

The outbreak of novel coronavirus in January 2020 is set to pose severe uncertainties and challenges to the growth in 2020. With 14,489 infection cases confirmed as of Feb 1^st 2020, the resulting decline in retail traffic as well as forced store closures will negatively impact retail sales in Q1. The epidemic will also strengthen the position of e-commerce and delivery services, especially in fresh foods, as consumers try to avoid traditional wet markets.

What’s in store for 2020?

1.  Big players expect to recover as they embrace digital transform and diversify their operation model

Despite reduced footfalls for hypermarket retailers, they are actively embracing digital transformation and adopting new store formats and operation models to grow. Both RT-mart and Walmart have remodeled their stores, adding features such as self-service facial recognition checkouts. They are also leveraging multi-format strategies to bring customers convenience and freshness aside from value. The tie-up with e-commerce players such as Alibaba and JD also helped hypermarkets to tap into a growing appetite for fresh groceries and speedy delivery services. However, it is critical for the big players to make sure they get their value proposition and fundamental offer right. The success of Costco’s opening in China suggests that Chinese shoppers are willing to shop in big box retailers if they are able to offer quality products with a strong value appeal.

2. Step up the O2O service to enhance customer experience

Loss in footfall is a common challenge for bricks-and-mortar stores, as a result winning consumers’ attention and driving basket size is the key to growth. With enhanced infrastructure and technology, Chinese consumers expect to buy their groceries anytime and from anywhere.  The O2O delivery service has already become an integrated part of the retail offer, regardless whether they are a big or small player, hence the quality of service as well as the digital experience will differentiate winners from the rest.  The market will be increasingly dominated by a handful players, such as JD.com, Ele.me, Meituan as well as third-party players such as Dmall.  Delivery services are expected to reach a new penetration high with the concern of coronavirus in Q1.  

3. More competition for small formats as the space becomes more cluttered

Continuously rising store rental and labor costs along with strong consumer demand for convenient shopping experiences have demanded that stores generate higher sales per square meter and more straightforward layouts for their customers. In 2019 most large players have launched new small formats, such as Yonghui Mini and Walmart Huixuan to get closer to shoppers and meet their daily needs.  Yet the speed of expansion should go hand in hand with the retailer’s unique selling proposition. For example, Suning is transforming its convenience stores as one-stop shop for both daily necessities and services including coffee, printing services, utility payments etc. This helps drive traffic and gives Suning a chance to up-sell to customers on higher-margin services. 

4. Regional consolidation will continue

Local retail giants have intensified their M&A activities to expand their presence across different retail formats and areas. The regional champion, Wu-mart has made active acquisitions over the past two years. These include taking a controlling stake of 55% in the Chongqing Department store together with Bugugao in June and a 80% stake in Metro in October. The top 10 bricks and mortar retailers in China in 2019 only took up less than a 60% share of modern trade, even in the east region.  As the growth in the future is increasingly determined by operational efficiency rather than blind expansion, more M&A will help to consolidate the retail landscape and make big players even stronger at a regional level before more national players emerge.

5. China's e-commerce giants doubled down on China's lower-tier cities

Consumers in China’s less-developed areas are driving the next wave of consumption growth in the country. Over the past three years the gap in e-commerce penetration between upper and lower tier cities has narrowed, with 75.7% of shoppers in lower tier cities using e-commerce to buy FMCG products. Alibaba has invested 10 billion yuan in its daily deals site Juhuasuan, demonstrating its commitment to stimulate further growth from lower-tier cities. This tier of cities contributed 70% of Alibaba’s new active customers in 2019. Competing with this is JD’s newly launched Jingxi platform, and Pinduoduo, China’s original group-buying platform, which has a strong focus on lower-tier cities. As China's top tiers market have become saturated, more growth is expected to come from from lower tier cities in 2020.

However, the market found a bright spot in increased sales of plant-based products as many shoppers pledged to make healthier choices at the start of the year.  Matthew Botham, strategic insight director at Kantar, said: “Retailers embraced Veganuary, which brought plant-based foods to the fore.  Sales of alternative milks grew by 20%, while meat, fish and poultry dropped by 3%. 

“Though shoppers reduced their consumption of meat and dairy, households didn’t turn their backs on animal products completely.  This points to an increase in flexitarian lifestyles as people look to cut back rather than go cold turkey.”  

Dry January also made its mark on supermarket sales with the number of households abstaining from alcohol purchases increasing to 22%, up from 19% this time last year.  The only retailer to buck the trend was SuperValu, which grew its alcohol sales by 7.6%.

Overall, Lidl was the strongest performing retailer this period, increasing its market share by 0.4 percentage points to 11.0%.  Matthew Botham continues: “Lidl’s growth was driven by increased basket sizes as shoppers added three more items to their shop than the market average.  More and more people are picking up their groceries at the retailer and 71.4% of households chose to shop at Lidl at least once over the latest period.” 

SuperValu was the only other retailer to accelerate growth over the 12 weeks as its market share grew by 0.1 percentage points to 21.7%.

At the other end of the market, Tesco’s sales were unchanged from last year as the grocer conceded 0.3 percentage points of market share. Matthew Botham says: “As the General Election loomed, falling consumer confidence meant a decline in shopper frequency for the market as a whole.  While Tesco bucked this trend and shoppers visited the retailer more often, it wasn’t enough to boost sales and growth fell to 0.0%.   

“Part of Tesco’s response was to take action by addressing consumer demand for sustainable packaging.  The retailer made headlines with the announcement that it’s removing plastic wrap from its multipack tinned items while still offering the multi-buy deal to customers. Given that shoppers bought over 139 million packs of tinned goods over the past year this is a significant step towards reducing plastic waste and is bound to be popular with eco-conscious consumers.”

Aldi also continued to press home its sustainability credentials by removing the polystyrene trays from its pizza range. The retailer again posted strong growth this period – increasing sales by 5.4%.  Meanwhile, Dunnes had another formidable 12 weeks, with sales rising by 3.3%.  However, that was a slower increase than in recent months, as falling basket sizes and lower prices impacted growth at Ireland’s largest retailer.

1.    "Me? Old? Never!"

Considering the changes in lifestyles and rising retirement ages, today’s seniors are nothing like those of yesterday. They were born into a consumer society with television, lived through the women’s liberation movements in the 1970s, are highly active, love travelling and are not afraid of starting a new life. ‘Being old’ is now a question of state of mind rather than age. And at what age does one become officially senior? The idea of ‘what age do you feel?’ is crucial. On average, a person aged 55 feels 45. Some believe that 80 is the age from which one might be considered old. Our studies have shown a radical change in food purchasing behaviour from the age of 55.

2.    An important source of growth

In France, a senior is born every 37 seconds! People aged 55 and over will represent over 39% of French people in 2070, according to INSEE projections. The ageing population is causing the emergence of more and more products and services aimed at older people: the ‘silver economy’. So, this target should not be ignored when it comes to generating growth. For example, in the FMCG/self-service fresh products and traditional fresh produce market, 86% of value growth in 2018 was generated by seniors

3.    Vigilant and involved consumers

When they go shopping, seniors are very sensitive to the products that they buy, with two major concerns: eating better and health. Seniors are the most involved consumers in the food market. They are more attached to local produce and Fairtrade than the average consumer. They are more familiar with ‘origin’ labels and trust them more. They also have more marked health concerns: “I am on a diet for medical reasons”, “I check the sugar content of food products”, “Nutritional information helps me to choose”

4.    Enjoying the good things in life, often in the kitchen

Seniors are not pushed for time. They go shopping more regularly and talk to people when they go to the shops. They cook more, spending longer over preparing their meals. Fruit and vegetables form a larger share of their diet and they are more likely to make use of kitchen aids. They enjoy life and are more likely to have a pre-meal drink than the average consumer. But this is also true for starters, cheese plates and desserts, to which seniors are much more partial. The proportion of seniors who enjoy outside-the-home consumption is still much lower than the average, but is increasing much more rapidly.

5.    Genuine traffic ‘boosters’

They go shopping more regularly (both routine and top-up shops) and their purchases are particularly fragmented: 8.1 stores frequented for a 60-something consumer's household compared with 6.8 for an under-35. Specialised circuits represent 24% of their purchasing acts with an unusually high frequentation of stores such as Picard, Grand Frais, Naturalia or Marionnaud. This can be a boon for distributors seeking to boost the traffic in their stores, provided they can offer service and advice. There are still few initiatives in this sense, but they are coming, such as the first supermarket dedicated to seniors, launched by Intermarché in late 2018: “Bien chez moi”

6.     Connected, including when it comes to shopping

Contrary to conventional wisdom, 93% of seniors have a mobile phone, 51% a smartphone and 37% a tablet. They are well connected at home too, 85% have a computer, and 88% of them have internet access. As regards social networks, 46% have a Facebook account, with an average of 78 friends. This is also reflected in the ways they shop: 1 in 10 seniors have already bought FMCG+self-service fresh products online. However, their media habits remain fairly traditional: they rely particularly on the press (index of 133 compared with the overall population), radio (124) and television (123).

7.    Multi-faceted seniors

A person aged 60 and another aged 80 have not developed in the same economic, social and political context, and these parameters have influenced the way they consume. There are thus four groups of seniors, with very different behaviours. The ‘HMSM (Hypermarket/Supermarket) Generations’, are baby-boomers characterised by mass consumption and the emergence of the hypermarket. They differ from the ‘Traditionals’, who are the oldest group and come closest to our clichés (attached to small, local businesses, seeking social contact through shopping, etc.). The ‘Healthy Eaters’ are focused on more responsible consumption. And finally, the ‘Uninvested’ are characterised by a lack of interest in consumption.

8. Growing old is ‘in’

A societal change is in progress in favour of a more positive image of ageing. The media are starting to make a fuss of seniors. Talking about this target no longer seems taboo, with codes that no longer stigmatise the elderly. The new Coke Zero advert is thus establishing older people as a new icon. The ‘going grey’ movement, which encourages people not to dye their grey or white hair, is gaining momentum. White hair is now becoming a source of pride and redefining fashion, like the journalist Sophie Fontanel, who is happy to proclaim her ‘blande’ (mix of blonde and white) status. Younger generations are adopting a ‘silver attitude’. A new category of Millennials has appeared: Sellennials, who are rethinking their methods of consumption by bringing back the habits of their forebears. They are adopting the slow cosmetics trend, want to eat responsibly, make compost, grow their own herbs and customise and recycle their old clothes.

Incremental growth which adds value to the category as a whole is the ultimate marker of success. But it’s easier said than done.

Our ranking of 2019’s most successful launches is here to show you how. The ranking sets out last year’s top ten new products in terms of spend, but also crucially ranks them by how much incremental growth they created for the manufacturer and their category overall.

Find out more:

• Download your copy of the ranking through the link at the right of this page to find out today which new brands made the top ten.
• Watch the webinar on demand. Our innovation expert, Russell Hill, will take you through the ranking, giving the inside scoop on the recipe for success for each.
• Read the recent blog from Russell, where he sets out the five factors for success and the importance of an incremental mindset.

Get in touch with out expert to find out how we can help you make sure your next innovation is more than just a roll of the dice.

Fraser McKevitt, head of retail and consumer insight at Kantar, comments: “Many people start the year with good intentions and pledges to make healthier choices following the excesses of the festive period.  Those who committed to drinking less in January helped the retailers boost sales of non-alcoholic beer by 37% and adult soft drinks by 3%, as shoppers reached for alternatives to their favourite tipples.  Of course, not everyone has been abstaining, and more than 15 million households still bought alcohol during the past four weeks.”

The retailers welcomed the return of Veganuary by launching a number of new product lines including ‘Gro’ from Co-op, ‘Plant based’ from Asda and Waitrose & Partners’ vegan range.  Fraser McKevitt comments: “It’s clear the Veganuary campaign is having an impact.  More than twice as many consumers bought one of the supermarkets’ explicitly labelled plant-based products in January 2020 compared with the festivity-filled December 2019.  Sales of meat substitutes such as soya mince or vegetarian burgers and sausages were 14% higher than January last year, while sales of lentils were up 6%, lettuce 10% and aubergine 14%.”

Health was the most popular reason for people getting involved in Veganuary*, cited by 42% of participants, followed by environmental concerns (28%) and ethical reasons (27%).  Fraser McKevitt continues: “Nearly half of people giving up meat and dairy in January did so because they perceive it as a healthy choice.  However, the plant-based food boom is not primarily caused by a rise in the number of people following strict vegan diets – vegans still make up just 2% of the population and only 5% of us are vegetarian.  Instead the trend is being driven by many people making small changes and trying to eat more plant-based meals and the retailers are responding accordingly.”

Among the individual retailers, Ocado’s market share increased by 0.2 percentage points to 1.4% and Fraser McKevitt comments: “Ocado was once again the UK’s fastest growing grocer with sales 11.2% higher than this time last year.  More than half of the online retailer’s sales come from customers in London and the South of England, but its quickest growth is actually found outside of this heartland in the North of England where its sales were 17% higher than the same time last year.”  

Lidl also achieved double digit growth, up by 11.1% year on year.  Fraser McKevitt expands: “Branded items account for a small but growing part of the discounter’s sales, with household favourites in cleaning and confectionery contributing to a 19% increase during the past 12 weeks.  Meanwhile, Aldi increased sales by 5.7%, growing chilled ready meals and spirits both by 12%.  A key factor in the advance of the discounters has been their ability to attract additional shoppers, each welcoming more than 800,000 extra visitors through their doors in the past year, supported by strong store opening programmes.”

Sainsbury’s was again the best performing of the big four retailers as its sales fell by 0.6% and its market share was marginally lower as result.  Sainsbury’s now accounts for 15.8% of the market, down from 15.9% at the same point last year.  While still declining, Sainsbury’s performance is improving, and online sales were a bright spot – growing by 7% year on year.

Morrisons continued to lose market share, down from 10.6% last year to 10.3% in the past 12 weeks.  Fraser McKevitt comments: “Morrisons is bucking the trend in the overall grocery market, where fewer groceries are being purchased on deal, conducting 47% of its sales through some type of promotion during the past 12 weeks, a 1.3 percentage point increase on last year’s level.”

Asda’s sales declined by 2.2% and its market share fell back to 14.9%.  However, its upmarket ‘Extra Special’ range proved popular with customers and achieved double-digit sales growth, expanding most notably in fresh meat, crisps and alcohol.

Co-op continued its run of growth, which stretches back to May 2018, with sales now up by 2.7%.  The convenience retailer’s share rose by 0.1 percentage points to 6.0%.  Meanwhile, Tesco’s market share dropped by 0.4 percentage points to 27.3% and sales were 0.9% lower than a year ago.

Iceland’s sales grew ahead of the overall market at 1.4% and its share held steady as a result.  Waitrose’s sales were 1.5% lower than that same period last year and its market share slipped from 5.1% to 5.0%.

The impact of this outbreak has some similarities to SARS in 2003. Kantar Worldpanel China has reviewed their consumer purchase data across 15 chinese cities from 2002-2003 to shed light on how changes in consumer behaviour might bring new challenges and opportunities for manufacturers and retailers.

Impact on the FMCG Market

The first SARS case was discovered in Guangdong province in December 2002 and the first reported case outside of Guangdong happened in Beijing in March 2003. However, the major increase of infection happened in April and May 2003 and the spread of virus was contained by June.

The impact on the FMCG market during the first half of 2003 was significant, especially during April and May where we observed a sharp slowdown. However, by June the market had recovered returning to similar growth rates seen at the beginning of the year. 

Categories in High Demand During SARS

The dine-out market was heavily impacted during SARS as consumers opted to dine at home instead. Culinary and instant food categories showed a noticeable sales increase in the 12-weeks ending May 2003. During this period, consumers also increased their purchase of household cleaning and personal cleaning products. 

Handwash was a very small category in China back in 2002. This category has become more and more popular since 2003 as consumers started to purchase more handwash during SARS.

The Impact on Retailers

With the continuous spread of SARS, consumers chose to stock up mainly from the neighbourhood supermarkets back in 2003. Supermarkets and convenience stores showed a significant increase in sales during the 12-weeks ending May 2003.

E-commerce started emerging in China during 2003. On10th May 2003 Taobao was launched, and has since enjoyed 17 years of continuous growth, along with many other e-commerce platforms.

With the high transmissibility of the new coronavirus coinciding with the massive migration during Chinese New Year, the government’s public measures have also evolved since 2003, when home quarantine was less mandatory. In 2020, we expect to see a large switch of shoppers spend to omni-channel purchasing and an increased share of EC retailers during this past Chinese New Year. The “No Physical Contact” new OTO/EC delivery model fits very well with consumers’ needs when advised to stay at home.

Devoted to understanding consumer behaviour, Kantar Worldpanel will continue to monitor the 2020 coronavirus’ impact on consumers’ FMCG purchasing and we expect to see some differences this year compared to 2003 as the market and policies have both evolved. We will share more updates with you in the coming months.

While it’s difficult, it’s not impossible to generate incremental sales. Our expert analysis of new product launches finds there’s five factors that successful innovations have in common:

Think incremental: All launches should aim to add incremental value to the category overall. Debutants which simply encourage shoppers to switch from one product to another are of little value to retailers – giving them no motivation to make space on already crowded shelves. The best-performing launches either bring in new shoppers or entice them to make extra trips or buy in bigger quantities. The challenge is that attracting more shoppers is a difficult ask; many categories have already reached high penetration and struggle to bring in new buyers. It is equally hard to increase sales volumes in categories where shoppers are actively looking to cut spending or consumption.

One of the most effective ways around this challenge is to target different occasions through a brand extension. Bailey’s Strawberries and Cream has taken a much-loved brand and applied it to summer occasions, new territory for a tipple which is more associated with curling up next to a log fire. Similarly, Elvive’s Dream Lengths takes a strong existing brand and delivers a distinct benefit. Both of these launches focus on new opportunity rather than duplication. Only by developing this incremental mindset can a brand drive true growth.

Premiumise: Given it is so difficult to reach more shoppers, one of the most effective ways to generate value through NPD is to encourage existing shoppers to trade up. To add value, new lines should command a higher price point; our studies show that a price premium of 30-40% is best to maximise revenue for the brand and category. Of course, this approach only works if the product can sustain this price premium over time. Marketing your brand as ‘the best’ encourages shoppers to trade up, but the product needs to justify its premium price tag. Our ranking of the top NPDs of 2018 found that successful launches from Persil, Bold and Comfort commanded a price premium. Added benefits, plus premium positioning, higher price and high-end packaging is the formula for success.

Crack the big four: Our research finds that, in FMCG, it is vital to for new lines to get listings in the top four grocers in order to reach £5 million sales in the first year. Brands which are listed in the top four retailers are 10 times as likely to hit this sales target as those which fail to do so. In order to win as many shoppers as possible, listings in the key channels are essential. Being there is one of the simplest principles, but one of the most important.

Get promotion right: The principles outlined by leading manufacturers, especially P&G, show that innovation is the source of long-term growth, whereas price promotions provide a short-term sales bounce. However, the mantra “promotions win quarters, but innovation wins decades” is open to possible misinterpretation. While long-term growth is driven by innovative product development, price promotion is a vital tool in the marketing of NPD. If a manufacturer launches a new product in a highly promoted category, it follows that the NPD needs to be promoted to gain traction with shoppers. Therefore, for those brands operating in a highly promoted category like crisps and snacks, it is essential to promote. Walkers, the market leader, promotes its NPD at a similar level to its core lines.  

Capture the zeitgeist: The greatest NPD will incorporate all of the above principles but add one crucial element; it will tap into a current trend. Halo Top, 2018’s star-performing NPD, encapsulates the trends of our age. As health is clearly a greater issue for shoppers now, it makes sense that a successful innovation incorporates this. Halo Top crucially creates a healthy indulgent product, addressing the trends of health and indulgence in one product. It also encourages shoppers to trade up with its high price per volume and premium positioning.

Applying these principles will not change the fact that successful NPD is hard to achieve, especially in the UK, but it does mean a much greater chance of success. 

Our ranking of the most successful innovations of 2019, published next week, will uncover which brands are getting it right.

Dominic Sunnebo, Global Director for Kantar comments, “iPhone 11 accounted for 1 in 10 of all Smartphones sold across Europe and the US combined in the fourth quarter, that’s a phenomenal achievement for Apple. It is more than double the share iPhone XR achieved over the same period. In Europe and the US, the new iPhone 11 family achieved 50% of Apple’s total Smartphone sales in the quarter, up from 36% for the equivalent iPhone XS/XS Max/XR combination, highlighting real progress for Apple’s aim of getting its huge user base onto the latest models and stabilizing device lifecycle.

Samsung sales share held flat across Europe and saw a small increase in the US.

Dominic Sunnebo continues: “The new A series is performing very well for Samsung in the US, perhaps too well. Whilst overall Samsung share is up marginally in the US, the mix of models has changed dramatically over the year, with A series now making up more than one in three sales.  Note series sales have remained relatively robust, but it’s clear that Galaxy S series sales are beginning to lose out to cheaper priced A series models, which will have implications for ASP (average selling price).

Huawei continues to see share falter in Europe as the trade war continues to bite. Combined Huawei/Honor share across Europe fell by -4.4% pts to 16.4% in the fourth quarter. By contrast, its Chinese rival Xiaomi grew by +7.2% to hit a share of 14.2%, getting within touching distance of the third spot in Europe, behind Samsung and Apple. With the UK market still relatively untouched by Xiaomi, reaching the third spot in Europe is both possible and likely.

In Urban China, Huawei and Honor combined held 44.2% of the market in the fourth quarter, up 5.4%pts over the year. The main homegrown challengers, Xiaomi, Oppo and Vivo all saw their share decline over the same period. Despite wider trade challenges, Apple saw solid growth in Urban China, with iPhone 11 the top selling model in the region, whilst the more expensive iPhone 11 Pro and iPhone 11 Pro Max models made up #3 and #4 top selling models.

Find out all the figures in our data visualisation tool. 

Against the backdrop of a declining share for modern trade, compact hypermarket and smaller formats bucked the trend with a value growth of 10.1% by attracting more shoppers and increasing the number of trips shoppers make. Vanguard opened two Vanguard Marts in Hangzhou and Suzhou in November with plans to open 100 more in the next three years.  The Vanguard Mart is a more compact format with smaller non-food sections and expanded fresh food ones as well as full scan-and-go and O2O deliveries.

The Double 11 festival fueled the e-commerce growth and Alibaba Group announced that it generated RMB 268.4 billion of gross merchandise volume (GMV) on November 11, 2019, an increase of 26% compared to 2018. Its growth is powered by lower-tier cities and livestreaming. Three out of 10 urban households in county-level cities and across the county purchased FMCG products from Alibaba in the past 12 weeks, which is an increase of 11 ppts compared with last year. This year brands are running influencer livestreaming campaigns in order to activate viewers’ purchasing intent and transactions, Taobao Live for example generated nearly RMB 20 billion in sales. More brands surpassed the 100 million RMB GMV mark this year, indicating that bigger brands are accounting for a larger proportion of sales.

All of the major retailers achieved growth over the festive season, albeit not necessarily as a result of typical Christmas favourites.  Charlotte Scott, consumer insight director at Kantar, said: “The nation enjoyed a less traditional Christmas this year with many of the usual seasonal classics falling out of favour. The number of people buying turkey fell by 3% and the trimmings didn’t fare much better as sales of Brussels sprouts, carrots, parsnips and potatoes all declined.  It was a similar story in the dessert aisles as the value of mince pies dropped by 13% and Christmas puddings by 10%. Ham resisted the trend, growing at 5% as shoppers paired it with their Christmas dinner.

“It was a relatively sober Christmas, as sales of alcohol dropped by €10.5 million. Shoppers spent 5.3% less on beer and 2.2% less on wine. Only SuperValu and Dunnes bucked the trend, growing alcohol sales by 3.9% and 0.7% respectively.  Soft drinks sales rose by 2.7% as shoppers turned to alternative, alcohol-free options."

Dunnes retained its position as Ireland’s largest retailer, and was the only grocer which didn’t experience a slowdown in growth compared to last month. Christmas is typically Dunnes’ strongest season, as shoppers trade up to more premium products, and this year was no different. It achieved a market share of 23.6% in the latest 12 weeks, 1.2 percentage points higher than its average over the rest of the year.  

Meanwhile SuperValu, which typically performs best over the summer, had a welcome Christmas boost and increased sales by 1.4% – slightly higher than it achieved in the same period last year. 

Aldi was the strongest performing retailer over Christmas, with sales up 6.3%, while Lidl’s market share of 10.9% is its highest ever over the festive period. Charlotte Scott continues: “Aldi and Lidl have increased their appeal among shoppers at Christmas and both reached their highest ever festive market shares. While in previous years customers have chosen to do their seasonal shopping elsewhere, Aldi and Lidl found success in 2019 by expanding their ranges and encouraging big shops.”  

Both Aldi and Lidl bucked the trend of falling prices across the sector, and saw prices per pack increase during the period. This was down to a concerted push on brands and premium products, evidenced by the popularity of their premium own-label ranges, which outperformed competitors and grew by 9% at Aldi and 6% at Lidl.

Tesco’s growth was the slowest in the market at 0.1%, which saw it lose 0.3 percentage points of market share and fell to 22.0%. Charlotte Scott says: “Despite only marginal sales growth, Tesco remained the nation’s second largest grocer as shoppers embraced its well-known brands and familiar layout over Christmas. Tesco customers made an average of 16.2 trips to store in the latest period, compared with 15.7 last year.”

Consumers’ need for instant fulfilment with ready-to-eat meals, drinks and a wide variety of fast-moving consumer goods (FMCG) products has contributed to the growth of convenience stores across Asia.

In our latest quarterly Asia Consumer Insights, we put the spotlight on Taiwan and the Philippines focusing on the development of convenience stores in these two major markets.

Global FMCG value share by channel indicates that convenience stores now account for only 4.2% of the market with a healthy growth of 2.5%. It’s forecast that there will not be much change by 2025 in terms of value contribution. In contrast, across almost all Asian markets there is huge potential of growth for convenience stores, especially in developing markets where this retail format is showing a solid performance and expanding rapidly.

The paper also reveals that Asian FMCG has maintained a stable growth of 4.7% in Q3 2019 while the non-food sector has continuously grown ahead of total FMCG market. Finally, we identify challenges and opportunities for convenience stores to acquire new shoppers to continue growing.

Download the full paper through the link on the right side of this page and contact our expert to get a full picture of the key FMCG performance indicators, consumer insights, trends and opportunities across Asia.

For the battle of the big brands, understanding and subsequently leveraging the product drivers, key influences and touchpoints becomes paramount. Francisco Bastos, Global Strategic Insight Director at Worldpanel Division, Kantar comments: “Whilst we know that consumers purchase wearables for fitness/health, weight loss and connectivity, the primary drivers vary by brand. For Apple owners, connectivity and organisation are still the main drivers, whilst Fitbit owners purchased primarily to improve health and fitness. We will be using our ComTech panel to track over time how the importance of these drivers changes, as the differing brand offers evolve.”

In the US Fitbit has the largest share of wearables at 40% and historically has had a primary focus on fitness tracking. It appeals to older audiences (45+) compared to other wearables and is at the cheaper end of the market with over 76% of owners being in the low/mid spend price tier, with growth in share coming from the mid-tier. At this price point Fitbit ownership has seen a higher incidence (index 132) of gifting compared to other wearables and brand choice influencing is done by friends and family.

So, do people start with a fitness tracker and then upgrade to a smartwatch? Smartwatch share of wearables in the US is on the increase. In Q3 2017 smartwatch ownership was only 6% with fitness trackers at 11%. With total wearables in Q3 2019 at 21% share is split 50/50 between smartwatches and fitness trackers. Francisco Bastos continued: “From the ComTech panel we know that of people who owned a fitness tracker in Q3 2018, Fitbit owned a whopping 75% share. However, worryingly for Google, in Q3 2019 of those that purchased a new smartwatch only 37% stayed with the Fitbit brand, but 47% chose Apple, so upgraders are leaving the brand.”

Many people will be watching with interest to see how the Google acquisition will develop the Fitbit product offer, as Google will be looking to further develop its own smartwatch software Wear OS. With concerns over trust permeating many Google products, such as smart speakers, and concerns over the perceived potential to sell personal or health information (which Google have denied) this could nudge consumers to switch to alternative brands. However, if the features and benefits achieved by linking personal health information to Google searches outweigh concerns, then people might make a choice to stay with the brand. Francisco Bastos comments: ‘Consumers are increasingly concerned about the privacy and control of their personal data.  With Apple and Samsung also increasingly offering wider ranges of wellness and health features, the need to protect personal data and trust in brand could become a driver for brand choice within wearables’.

Apple with the second largest share of wearables in the US at 27%, have put a more recent focus on fitness and health with the inclusion of a heart rate tracker, female cycle tracker (think fertility here) and a good tracker for all training options alongside the communications notifications and music streaming and access to apps that you expect from a smart device. At the premium end of the market Apple's 64% of owners are in the high/premium spend tier, and Apple converts a higher percentage of sales through its stores compared to other wearables, so a high street presence remains a vital touchpoint for this brand.

Samsung with just 7% share of wearables in the US, have invested in the Samsung Galaxy Active watch to specifically deliver a product for the active market. This is providing a real point of differentiation with 26% of owners citing a ‘specific sports model’ being a key purchase driver compared to 24% Apple, 16% Garmin and 12% of Fitbit owners. A key touchpoint for Samsung owners is also instore with almost one third of owners visiting a retail store to browse compared to 23% for all wearables. However, for Samsung recent purchasers, two thirds of consumers still ended up purchasing online. Samsung customers are also the most satisfied of wearable owners, so significant work has obviously been done to ensure the best customer experience, increasing the chance of customer retention and reducing customer churn.

Garmin remains a more niche brand targeting the ultra-outdoor enthusiast. With solar charging, elevation adjustment, oxygen saturation measurements… it is generally targeting the seriously active adventurer. With a market share of only 5% in the US, Garmin would do well to consider wearables product evolution and positioning alongside the tech giants. For most wearable owners, ‘brand’ is the top purchase driver, however for Garmin it is functions available (60% of owners stated this was a main purchase criteria), with fitness tracking being of primary importance. Keeping a focus on developing this must be an important customer retention strategy. Historically a larger % of their consumers were in the low-price tier, but Garmin customer profile is changing and in the past year the percentage of owners in the mid-price tier has grown from 15% to 30%. Cost is a more important purchase driver for Garmin customers than other wearable owners, with over 45% stating this was a main criterion for choice. With over 70% of recent purchasers doing so online, key touchpoints in converting these discerning consumers is through website reviews. Francisco Bastos continues: “Slightly concerning for Garmin, are the lower levels of satisfaction amongst their customers. Identifying customers at risk of switching and their pain points will be important for Garmin to retain customers in this increasingly competitive sector.”

There is huge scope for the whole wearables category to grow and tracking from the Worldpanel ComTech panel means Kantar will be able to identify the tipping point for mass adoption and the key triggers. For now, smartphones are the communications tool of choice. In 2016, futurologist Ian Pearson, declared that by 2025 smartphones will be obsolete as augmented reality takes hold. He believes that there will be a small bracelet (wearable) that pulls up a hologram screen in order to text and send phone calls. Seems like Google might be on to something and the tech giants agree!

Notes to editors
Data is based on Kantar’s Worldpanel ComTech, US Q3 2019. Globally, the panel tracks the decision-making journey for technology including smartphones, tablets, laptops, TVs, smart speakers, domestic appliances, and also Wearables (smartwatches & fitness trackers).  From purchase triggers, brand consideration, evaluation, touchpoints & intention through to purchase, usage, satisfaction and loyalty/switching behaviours, Kantar provides strategic guidance on how to improve customer acquisition and retention.

Comtech global panel shows that wearables ownership varies considerably. In Q3 2019 21% of US and Australians, and 24% of people in the UK own a wearable (smart watch or fitness tracker). However, in Japan only 5% of people own a wearable. Europe ownership ranges from 26% in Norway to just 11% in Netherlands.

Fraser McKevitt, head of retail and consumer insight at Kantar explains: “There was no sign of the post-election rush many had hoped for in the final weeks before Christmas, with shoppers carefully watching their budgets.  In fact, many of us cut back on traditional and indulgent festive classics.  Sales of Christmas puddings were down by 16%, while seasonal biscuits were 11% lower.  Turkey sales also fell by 1%, partly down to a shift from whole birds to smaller and cheaper joints such as crowns.  

Fraser McKevitt continues: “Shoppers also popped fewer corks this year, as sparkling wine sales dipped by 8%.  However, both beer, up 1%, and still wine, up 2%, were more popular than in 2018.  As predicted, Monday 23 December was easily the single busiest shopping day of 2019 – and indeed the largest shopping day ever recorded – worth £798 million as the nation stocked up before Christmas Eve.”

Overall, average household spending over the 12 weeks fell by £8 to £1,055, while total volume sales fell by 0.7%.  Meanwhile, like-for-like prices only rose by a fractional 0.9%, which was good news for consumers looking to control festive bills, but the low level of inflation did little to boost the market.

Among the bricks and mortar retailers, Lidl led the way with sales growth of 10.3% over the past 12 weeks.  It performed particularly strongly with branded products, where sales were up 24%.  Together with Aldi, the discount retailers took their highest ever combined Christmas market share.  Fraser McKevitt says: “At the end of the decade, it’s worth remembering just how quickly Lidl and Aldi have grown.  Their current combined market share of 13.7% is more than treble what they held in December 2009, an unprecedented increase over the course of ten years.”  

Individually, Aldi’s sales were up by 5.9%, and its market share grew by 0.4 percentage points to 7.8%.  Sales of the supermarket’s Specially Selected range rose by £18 million, the highest rate among all retailer premium own label lines.  This year’s ‘Kevin the Carrot’ adverts also went down well with shoppers, as the addition of new characters to the story helped to sell 2,498 tonnes of sprouts – an increase of 44% on last year.

Britain’s fastest growing grocer overall was Ocado, with sales rising by 12.5%.  The online retailer has now been the fastest grower since June 2019. 

The slow market made it particularly difficult for the largest retailers to increase sales.  The ‘big 4’ grocers were especially impacted by customers choosing to make one fewer trip to stores in the latest period.  Sales at Sainsbury’s fell by 0.7%, although its market share held relatively firm dipping by just 0.1 percentage points to 16.0%.  Sainsbury’s online sales were a highlight however, increasing by 7% with a total 1.1 million users over the past 12 weeks.  

Meanwhile, Tesco sales were 1.5% lower, with its share down by 0.4 percentage points to 27.4%.  Asda and Morrisons also saw sales fall by 2.2% and 2.9% respectively, with their market shares also dropping. 

Co-op’s 3.0% growth was ahead of the market, and enough to increase its share by 0.2 percentage points to 6.1%.  Much of its success was fuelled by chilled products, with fresh poultry sales up by 10% and convenience items like pizza up 9%.

Waitrose’s market share remained at 5.0%, unaffected by a 0.9% fall in sales.  Iceland on the other hand enjoyed a bright festive spell, as Fraser McKevitt explains: “Iceland’s sales rose by 1.3% as its recent newspaper coupon campaign helped to attract an extra 390,000 shoppers through its doors.  As well as increasing sales of frozen food, other categories which performed particularly well included soft drinks – up by 21%.  Iceland was one of the five retailers to win market share, gaining an extra 0.1 percentage points to stand at 2.3%.”

 “This drop in volume is the result of several factors in addition to changing demographics.  These include unusual weather at the end of the summer, the increase in out of home consumption as well as the consolidation of food delivery services in Spanish homes ” said Florencio García, Retail & Catman Sector Director in Kantar.

Mercadona and Lidl lead the growth 

Mercadona maintained its position throughout 2019 with 26.1% of the market, and in this quarter it increased its share compared to last year by 0.8 points. The Spanish chain has also recently opened its tenth store in Portugual.

Carrefour takes over 8.6% of the market, earning an increased share of 0.3 % over the previous year. During 2019 it has achieved significant growth in the fresh sector, which is key to generating more store visits. “The more we go to a store to buy fresh, the products that have a higher frequency of purchase, the more we end up buying in other parts of the store. This is one of the reasons that all the chains want to strengthen this section of their stores, and without a doubt, it is key to explaining Carrefours focus and progress in 2019, ” said Florencio Garcia.

Grupo DIA lost 1.4% share during this quarter, standing at 6.1% of the market, the lowest since its separation from Carrefour. DIA does have some positive signs though, such as a penetration above 60% of Spanish households so far this year and the evolution of its DIA & Go format.

Lidl has also earnt 0.8 points in this period to stand at 5.6% of the market.

Florencio García adds: “We must include Lidl when talking about the fight for second place in the Spanish FMCG retail market. The sales of Carrefour, DIA and Lidl will reach a very similar number of Spanish homes throughout 2019. For now Carrefour has a clear advantage especially due to the larger size of its shopping baskets, but without a doubt one of the most interesting factors to observe in 2020 is how these three giants, with quite different models, are performing. ”

Eroski Group (4.8% share of value) lost 0.5% in this quarter, maintaining the trend throughout the year.  Auchan (3.5%) is at the bottom of the top six but has a stable market share, waiting for the impact of its new Mi Alcampo stores to allow it to return to constant growth.

Market shares and penetration in Spain in 2019 (August- October 2019)

Christmas spending

Within this context the Spanish consumer is fully immersed in Christmas shopping, one of the most important times of the year for brands and retailers in terms of consumption.

“During 2019 consumers have made practically the same purchases as in the previous year, but have focused on more valuable products.  As we know that during the holiday period consumers are willing to spend more, we anticipate that spending this Christmas will grow along the same lines as it has throughout the year and that the volume will be maintained.” said Florencio García.

Christmas sweets, cava or cider will be the most common products in the Spanish baskets, at this time of the year, as well as chocolates, preserves and alcoholic beverages. At Christmas, spending on certain products such as raw prawns and cured ham tend to increase by around 50%.

Chinese mainland remains top of the list for growth in e-commerce sales by value with a 36.1% increase and continues to accelerate. In the last six months e-commerce grew by 10 penetration points to 73% of the population (three in every four Chinese households) buying groceries online. This increase marks Chinese mainland jointly with South Korea as the most advanced countries in the world for FMCG e-commerce.

Source: Worldpanel FMCG panel, Kantar, 12 months ending June 2019

Source: Worldpanel FMCG panel, Kantar
12 months ending June 19 vs 12 months ending June 18 vs 12 months ending June 2017

Asian economies continue leading the way in terms of online share of total sales. South Korea tops this table with an online value market share of 20.3% followed by Chinese mainland (15.2%) and Taiwan (8.7%).

In Western Europe, the UK gets the biggest share of online FMCG sales (7.6%) followed by France (6.2%).

Source: Worldpanel FMCG panel, Kantar, 12 months ending June 2019

Source: Worldpanel FMCG panel, Kantar - 12 months ending June 2019

Amazon’s FMCG sales growth is slowing down in France

In Europe, the most developed grocery sales country for Amazon is the UK with 10% of the online grocery market. The UK is followed by France, where Amazon has captured a market share of 5% of total online FMCG sales.

In the last year though, the internet giant is finding it hard to maintain its growth rate in France - down to 14% from 44% a year ago. This is due to the dynamism of its competitors, especially Carrefour and Intermarché, who have opened many new pick-up points, 232 and 85 respectively, in the last year. Additionally, the development of pedestrian pick-up points in bigger urban areas is making it harder for Amazon to grow.

Amazon is still not top of mind when it comes to grocery shopping in the UK, especially for big shopping missions. Eric Batty, global e-commerce business development director, Worldpanel Division, Kantar, comments: “The main challenge for Amazon is to achieve bigger grocery baskets – this pure player is not yet appealing for stock up missions and online shoppers currently tend to have a specific shopping mission when they buy groceries in Amazon.”

Online will be the leading channel in Asia by 2025

Online sales will represent almost one third of FMCG sales in the Chinese mainland by 2025 and one quarter in South Korea. In France and the UK, e-commerce will represent slightly less than 10% of FMCG sales.

Stéphane Roger, global shopper and retail director at Worldpanel Division, Kantar, comments: “We predict that by 2025, online grocery sales will double, meaning that 10% of global FMCG sales will happen online. The continued demand for convenience in urban areas, the integration between online and offline, the creation of new direct-to-consumer options and more technology will all help reach new targets beyond the current profile of affluent families with children.”

Source: Worldpanel FMCG panel, Kantar
 

Notes to editors

These findings are based on Kantar’s Worldpanel FMCG panel data for the 12 months ending June 2019. This research tracks more than 150,000 households across 21 countries that provide extensive and continuous information about their shopper behaviour.
Fresh produce is excluded from the definition of online FMCG.

Globally 2019 was a challenging year for FMCG, with political uncertainty in Latin America and Spain, Brexit in the UK, and an increasing concern about the planet in many markets. Our goal for 2020 is to help brands understand their consumers even better, which in this environment is essential if they are to keep growing their businesses.

Our experts forecast new retailer innovations in the UK that will blur the eating out, takeaway, convenience and pure online channels. In Asia, e-commerce will keep growing very fast, but bricks and mortar does still have room to grow. Latam’s FMCG growth will be linked to offering simpler and healthier options.  In Spain and France, products combining health and pleasure will continue growing fastest. A rising trend for India in 2020 will be premiumisation.

Globally, consumers will continue expecting brands and manufacturers to innovate in sustainability and environmental impact.  Partnerships will be particularly important with regard to technology.

Hear from our experts on the trends that brands should be aware of to make 2020 a promising year for changing consumer choices.

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Charlotte Scott, consumer insight director at Kantar, comments: “As countdown to Christmas begins, shoppers are already starting to splash out on old favourites.  Sales of seasonal biscuits have grown by 16% in the latest 12 weeks alone.  Tesco has been the standout performer in that category and the retailer has sold twice as many so far this year as it had by the same point in 2018. 

“Retailers have bet on confectionery with large seasonal tubs of chocolate on shelves earlier than in previous years.  In turn, shoppers have cashed in and confectionery sales are showing no signs of slowing down having already added €8.8 million of spend to the market this year compared to last.  SuperValu has been the real winner, growing the value of its sales in the category by 31.1%.”

A strong month overall for SuperValu saw it pull ahead of Tesco in the retailer rankings as growth of 1.7% took its market share to 21.6%, compared to Tesco’s 21.3%.  Both retailers typically increase their shares as we get closer to the holiday period and shoppers look for familiar names and brands in preparation for the festivities.  Charlotte Scott says: “SuperValu’s highest share since January is largely thanks to shopper penetration, which increased this period having fallen last month.  This coincides with the retailer announcing its new loyalty scheme with Visa in November, designed to appeal to existing shoppers while also attracting new customers.”

Lidl’s growth rate climbed to 5.8%, which helped to lift its market share to 11.6%.  The retailer’s strong performance has been thanks to an increase in the size of customers’ average shop as it continues to expand its ranges.  The average Lidl basket this period contained 17 items, a rise of 3.9% on last year. 

This month also saw Lidl announce a food waste initiative which cuts the price of chilled goods by up to 90% on their best before day.  Charlotte Scott says: “Typically, chilled products like fresh produce aren’t highly promoted by retailers, with less than a fifth of all prepared fruit and veg sold on deal in the past three months.  Lidl’s campaign may help it stand out from the crowd and discounts on prepared and chilled foods will likely be welcomed by shoppers as they start to prioritise convenience over the Christmas period.” 

Meanwhile, Aldi remains the nation’s fastest growing retailer at 7.9%, although this is a drop back from the 9.6% it achieved last month.  Its share currently stands at 12.2%, up 0.6 percentage points on last year. 

Still the nation’s largest retailer, Dunnes has held its market share steady compared to the last period at 22.8%, although this is 0.4 percentage points higher than this time in 2018.  Charlotte Scott says: “Dunnes’ growth has slowed slightly but it remains the third fastest growing retailer behind the discounters.  Dunnes typically relies on customers doing their big shop and stocking up with large visits, but the business has shown it can be adaptable.  We’ve seen a shift in shopper dynamics recently, as customers reduce their basket sizes but visit stores more often with trips up by 2.3%.  Ireland’s biggest grocer is also gaining traction outside of its usual Dublin heartland, growing strongly in Connaught and Ulster where it has historically held a smaller share.”

THE CHALLENGE
EVALUATING THE EFFECTIVENESS OF PROMOTIONS
Unilever had traditionally invested in promotions more than other brands, especially for big categories such as fabric solutions. However, the company did not have a tool to evaluate the effectiveness of promotions and therefore shape a fully-informed strategy.

OUR APPROACH
TURNING INSIGHTS INTO ACTION PLANS
Focusing on their two key brands, Omo and Surf, Kantar deployed its uniquely detailed expertise in category sales and associated consumer behaviour to unearth insights about each brand and then turn these into tailored action plans.

THE INSIGHT
DISCOUNTS, SUPERMARKETS AND PROMOTIONS
Kantar’s findings highlighted three key insights:

1. Discounts of 30% or less were more effective for the Unilever brands.
2. Hypermarkets were the channel where promotions drove more incremental volume.
3. Large-packs promotions were able to drive both uplift as well as incrementality.

THE IMPACT
DEVELOPING A MORE EFFECTIVE PROMOTION STRATEGY
Kantar’s findings were turned into specific recommendations for each of Unilever’s main laundry brands, allowing Unilever to develop a more effective promotion strategy with a potential revenue uplift of more than £5m.

RT-Mart showed a noticeable share uplift in the latest month especially in the west and east regions. Recently it has leveraged Taoxianda and Ele.me’s delivery network to further build a seamless shopping experience for consumers who want products delivered to their doorsteps within 30 minutes. Walmart saw strong fresh food performance and this sector has been key to its recovery. Recently, Walmart revealed its plan to open 500 new stores and depots (smaller warehouses) in China during the next five to seven years and revamp 200 existing stores over the next three years. Many of the new stores will be smaller formats, serving neighbourhood as well as depot warehouses for online shoppers.

E-commerce maintained a steady growth of 33.5%, with 56.9% of urban Chinese households making FMCG shopping online at an average frequency of 4.3 times in the past 12 weeks. The second annual China International Import Expo (CIIE) in Shanghai in early November showcased thousands of imported products that are making their debut in China. According to Kantar Worldpanel imported products are winning across city tiers through online platforms and as many as 17% of urban families in county level cities and counties have purchased imported FMCG products in the past 3 months, with milk powder and nutrient supplements being the most popular categories.

Fraser McKevitt, head of retail and consumer insight at Kantar, explains: “We’re yet to see consumers ramp up their spending in the run up to Christmas and, as anticipated, Black Friday only brought a limited boost for the grocers.  The number of people claiming to take advantage of Black Friday* this year fell to 53% from 57% in 2018 with signs of ‘promotion fatigue’ among consumers, an increased scepticism regarding the value of the deals on offer and some retailers pulling back from the day all together. The event is always less significant in the supermarket calendar and this year only 5% of Black Friday deal hunters bought something from a grocer.”

Fraser McKevitt continues: “With the General Election now only days away, people are waiting to fill their cupboards for the festive break and sales of Christmas puddings and seasonal biscuits are down 16% and 12% in the past four weeks compared to a year ago. But there are some purchases that just can’t wait – £28 million was spent on advent calendars in the past four weeks, up 1% on last year, and sales of fresh and frozen party food rose 7% as our diaries fill up with festive events and gatherings.”

Sales growth of 9.3% during the past 12 weeks propelled Lidl to a new record high market share of 6.1%.  Fraser McKevitt comments: “The good news continues for Lidl and 11.9 million shoppers visited one of its stores in the past three months – that’s 652,000 more than this time last year. Lidl has been encouraging its customers to make bigger shops, running newspaper voucher deals that offer £10 off when the holder spends £40, and larger baskets over the qualifying spend made up 17% of trips in November.”

Meanwhile, Aldi’s year-on-year growth of 6.2% is worth £129 million in additional sales and takes its market share to 8.0%. The discounter increased sales of its cheapest ‘Everyday Essentials’ range by 29% during the past 12 weeks but also served customers with a bit more money to spend – selling 15% more of its premium ‘Specially Selected’ range than this time last year.

Co-op achieved growth of 3.6%, with customers spending an extra £12 million in the chilled convenience aisles, on items including pizza, ready meals and cooked meats. Visitors to the convenience retailer also spent an additional £10 million on fresh fruit, vegetables and salads compared to the same time last year.

The four largest grocers came under further pressure this period with their collective market share dropping to 67.7%, compared with 69.1% this time last year. Fraser McKevitt comments: “While the big four all lost share in the past 12 weeks, 98% of the British public still visited at least one of their stores during the past three months. Based on previous years, we expect them to increase their proportion of sales in the coming weeks as shoppers turn to familiar favourites and the traditional retailers in December.”

Tesco was the best performing of the largest grocers over the past 12 weeks though it’s too early to say whether the newly launched Clubcard Plus subscription scheme has had an impact as sales fell by 0.8%. Sales at Sainsbury’s fell by 1.1% and at Asda by 1.9%, resulting in market shares of 15.7% and 14.6% respectively. Morrisons’ share of grocery sales dropped back 0.4 percentage points to 10.1% as sales declined by 2.9%.  

Ocado continued to be the fastest growing grocer, with sales 13.7% higher than this time in 2018. The online retailer is particularly popular with Londoners and its market share in the capital is now 2.6%, almost double its level of 1.4% nationally. 

Iceland’s growth accelerated to 3.2%, its best performance since November 2018, and its share held steady at 2.2%. While still declining, Waitrose sales fall in sales of 0.8% means its performance has improved for the fifth month in a row.

In the third quarter of 2019, China’s GDP growth rate dipped to 6%, the lowest level in 27 years, but this wasn’t reflected in the FMCG sector. In the first three quarters of 2019, total FMCG sales roles by 2.7%, 6.9% and 5.7%, maintaining the same pace as 2018. But as we’ve seen in previous years, that stable growth follows a regular pattern, with the “macro” product categories accelerating at two distinct speeds: fast and slow. Food and beverage categories grew a mere 2.3% in the first three quarters of 2019, while personal care and homecare had stellar performances at 11% and 7.8% growth respectively. 

These are some of the key updates on China’s FMCG industry from volume two of Kantar Worldpanel and Bain & Company’s latest annual China shopper report, “Despite slowing GDP growth, China’s consumers keep spending”, released today.

The FMCG volume growth in the first three quarters of 2019 increased from the same period in 2018 but could not offset slower growth in average selling prices – a drop from 4.6% last year to 3.7% this year, only slightly above the inflation rate. 

“Even as homegrown products dominate most of their categories in China, consumers have an enduring desire for imports,” explained Bruno Lannes, a Bain & Company partner in Shanghai and co-author of the report. “This is especially true for product categories where consumers perceive foreign goods as higher quality than those produced domestically, such as fragrance, wine and milk powder for example.” 

In the first six months of 2019, imports grew by 10%, close to twice the rate of overall FMCG growth. This was driven mostly by online sales of imports, which jumped by 30% in the first half of 2019. Imports accounted for 35% of all online sales in China during this time. 

For brands that have not yet penetrated China—or are just getting started—there is a path to success that emphasises the importance of digital platforms as a channel and brand-building tool. 

“By concentrating on selling online, foreign FMCG companies gain traction in China without the need to build a physical route to market model which can be more complex,” said Jason Yu, Managing Director of Kantar Worldpanel Greater China and co-author of the report. 

Larger brands that already have a significant presence in China need to adopt a different approach, one derived from the “4D” model – Design, Decide, Deliver, Digitise. It is not the full “4D” model, as brands will rarely Design products specifically for Chinese consumers when it comes to imports. However, the other “3D” fully apply: 

• Decide in China – Local speed is more important than global scale and operating models must be adapted for more local decision-making.
• Deliver at China speed – Use the ecosystem and micro-battles in place to keep pace with the market and through trial and error.
• Digitise the China business – Data is the new oil and key to breaking into new markets, this is an algorithm-driven economy and closed-loop consumer engagement models are key.

This approach is gaining importance as competition intensifies from Chinese insurgents. In fact, multinationals can also boost their odds of success by taking lessons from these newly-successful young companies.

“China continues to be the biggest consumer story in the world. Growing along with those consumers means making thoughtful and aggressive moves,” said Derek Deng, who leads Bain & Company’s Consumer Products practice in China and is a co-author of the report. “With so many players and so much at stake, winning here isn’t a matter of chance.”

Download the full report through the link at the right of this page.

THE NEED
SPOTTING OPPORTUNITIES
Mars manufactures and sells the four most popular chocolate brands across China - Dove, Snickers, M&Ms and Cuixiangmi – in 2018 they accounted for 34% of the amount spent on the category.

However, the total chocolate market had reached peak penetration in 2014 and in the years since has been losing buyers. Some exploratory work revealed that the one area in which sales were still growing was online, and that there was an opportunity amongst higher-income shoppers. Mars wanted to find a way to better engage this audience through their advertising.

THE APPROACH
LINKING MEDIA TO SALES
The media landscape in China changes rapidly. In 2016 TV ceased to be the most popular form of media. Online video subscriptions have kept increasing, thus advertisers face the challenge of losing reach from online video pre-rolls, and have to find other forms of digital activation to make up the total audience reach. As a big advertiser, Mars wanted to understand the effectiveness of sources beyond just TV. They were particularly keen to know the relationship between online video, other digital activation and TV in driving sales.

Kantar Worldpanel, a CTR service in China, has a unique ability to track the same panellists from media consumption to purchase behaviour, including their promotional read through their Consumer Media Measure methodology. These tools make it possible to evaluate, analyse and understand the links between media consumption and actual purchase behaviour with a consumer focus. This behaviour can then be modelled with sophisticated statistical techniques to measure how each form of media works – individually and collectively.

THE IMPACT
LEARNING AND IMPROVING
Over the last couple of years, Kantar Worldpanel, a CTR service in China, has worked with Mars to track the impact of media on sales for their Dove brand, and to then feed the results through into the next campaign and track the difference that it has made.

The first project was the Dove Crystal Ball campaign during Chinese New Year. The evaluation revealed that the whole campaign had reach, but online video overlapped considerably with TV, while mobile brought in incremental reach. Whilst the total campaign generated a sales uplift which indexed 124 against the benchmark for China, Online TV had a 20% higher ROI than TV. It was TV which generated the optimal uplift of around 6-7 exposures per month with around 4 for Online TV.

This insight was then applied to the next Chinese New Year campaign, running dual-copy of Crystal Ball and Gestures of Love, in 2017. The result was that the Online Video reach doubled compared to the previous year with much better cost efficiency. The total campaign led to an additional 2% increase in sales uplift with a similar ROI to the previous year but with a significant improvement for TV.

This study enabled the client to have a much clearer understanding of multi-media investment and dual-copy strategy during the Chinese New Year period and enabled them to plan better for 2018.

The preconception is often that in terms of grocery, the ceiling has been reached. But while 20% of all retail spending in the UK is now done online, it is less than 10% for grocery, underlining the potential of the channel.
 
Our new paper “Opening up Online” uncovers how moving just a fraction of bricks and mortar shopping trips online will generate bigger shops, more spend, and better profits.

Packed with expert viewpoints and fresh insights, pick up your copy today and discover:

• What lessons we can learn from Asia – world leader in online FMCG.
• Who buys online and why, and why brands and retailers need to move away from treating online shoppers as a distinct group. 
• How to deliver against shoppers’ expectations of a speedy and convenient online service.

Dipping a toe in to this dynamic and fast-moving channel will not reap rewards nor fend off your competition. In the exciting future of e-commerce, one thing is for certain: if you don’t do it online, someone else will.

Get your copy of the paper today, and get in touch for an expert assessment of the opportunities e-commerce holds for your brand.

Book your place on our webinar with our expert, Nadya Ardianti, who will share the main findings of the report on Thursday 12 December, at 10:30am.

The male opportunity

Another trend that is fast on the rise in the country is the growth of the men’s beauty and hygiene market. The number of Spanish men who say they are well informed of the latest trends and fashions in personal care is 34%, 10 points above the European average. The upshot is that men now make up 4 out of every 10 cases of weekly product use, half of which is from the 25 to 54 age bracket. “The challenge for categories growing in popularity among men is to speed up the way they are adopted as a standard routine because this represents a strong opportunity for growth,” adds Verónica Valencia.

At the purchase level, the industry has bounced back slightly in the past year, billing 1.3% higher than in 2018, but 14% less than ten years ago. However, retail traffic remains at a standstill. People continue to shop the same number of times, but each time they do so more sporadically, every 22 days (20 in 2011). Those that continue to grow are related to skin care, followed by make-up and hygiene products, “With a consumer more focused on taking care of themselves, where changes in their interests are having an impact on our habits, brands must adapt what they offer if they want to grow,” concludes Rosa Pilar López, head of the Beauty and Fashion consumer panel at Worldpanel Division, Kantar.

Notes to editors:

“Face of the Nation” is based on data from Worldpanel Usage Care panel, the only ongoing tracking for the use of health and beauty products, which collects data on 30 categories through an online journal. A representative sample of the Spanish population formed by 5,500 panelists, aged 11 to 74.

THE NEED
A DECLINING MARKET
The environment in which Danoninho Petit Suisse was trying to grow was quite a challenge in Brazil. Consumers were rationalising their spending due to economic difficulties. The Fromage Frais category was in decline, seven percentage points between the start of 2015 and mid-2016. As a result, the penetration for Danoninho Petit Suisse was also declining.

In this context, Danone was planning a global launch for a new pouch format of the product and the team in Brazil felt that they needed to look more closely at the reasons for the market decline before proceeding with the new launch.

They instructed Kantar to help them to better understand the current situation and identify new consumption occasions for the future.

THE APPROACH
SEGMENTING FOR SUCCESS
Using Kantar’s shopper data, the team were able to analyse the market as a whole and quickly realised that one of the reasons for the decline of the brand was because their target market, children under six, was shrinking. Census data revealed that this would only get worse in the future. This meant that increasing penetration was vital for the brand’s future success.

The analysis revealed that the target of children up to six actually consisted of two, very different markets. Those aged 4-6 years old were responsible for most of the decline the product was experiencing. Children up to 3 years old were the most important market for the brand – those that were heavy users in this age range were more likely to continue to consume the brand as they got older.

In addition, an analysis of consumption occasions using Kantar’s questionnaire service LinkQ revealed an opportunity to position the product as a healthy mid-afternoon snack to replace some of the unhealthy options that were currently being consumed.

THE IMPACT
MOST SUCCESSFUL LAUNCH IN YEARS
The results of this analysis offered some new opportunities for the Danone team which they were quick to capitalise on. To start with, they recalibrated their target markets to have Danoninho Petit Suisse aimed at children up to 3 years old, and they targetted the Danoninho liquid and pulp products at the 4-6 years market.

The global launch of Danone Petit Pouch was adapted for the Brazilian market so that the communications were targetted at the under-3s, which was very different to the positioning in Europe. They also aimed it closely at the mid-afternoon snack occasion.

The result of this was that the Danoninho Petit Pouch was the most successful new entrant into the category in Brazil since 2014. The fromage frais market as a whole declined the most of all categories and Danoninho Petit Pouch was the only product that grew. In the 12 months to February 2018, the brand reached 5.9 million households. This represents a 18.8% penetration of households with children up to six years old. Of this penetration, 5.5% was incremental to the brand.

Kantar, the world’s leading data, insights, and consulting company, announced today that key drivers of growth in the Asia beauty market are natural ingredients that help consumers achieve good skin health, makeup that helps people obtain a natural look, and skincare products aimed at male shoppers. The Beauty Trends in Asia report highlights the key drivers behind the +8% growth in beauty product sales between 2017-18 compared to +4% for fast-moving consumer goods (FMCG) as a whole, while sales of personal care products in the region continue to outperform the total FMCG market.

“Asian people believe health is almost twice as important to their happiness as having more money,” says Ashley Kang, Head of Beauty Sector at Worldpanel Division, Kantar. “They see what they put on their skin as a health supplement – and this has changed the products and benefits they desire. They are extremely knowledgeable too, so brands must be transparent in their communications. The wellness trend is also encouraging certain emerging formats to thrive.”

Derma-care is becoming mainstream

New sophisticated formats in skincare and makeup that provide derma-care properties are rising in popularity. Derma brands have reached almost 45% penetration in Korea, a massive influx from just over 25% in 2017. Their second highest reach is Taiwan at 40%, an increase from 37.6% in 2017.

Derma products contain sophisticated ingredients that deliver a high level of efficacy in treating specific skin issues, such as eczema, but are increasingly used to solve more general problems, such as sensitive skin and pollution protection. With consumer brands launching their own ranges, derma-care is increasingly more mainstream, when it was once a niche segment and a domain of brands with a heritage in pharmaceuticals. Developments in retail and distribution are helping to increase the footprint of these products outside drugstores.

The natural look is driving the launch of new ranges and variants

The most sought after look in Asia right now is a natural glow. Being well-hydrated is a prerequisite for this look, which has helped drive sales of serums that promise intense hydration. Penetration of serums is highest in Korea at 61%, rising from 58% in 2017. In China, penetration has increased from 18% in 2017 to nearly 26% today.

This ‘effortless’ natural look can require significant work. The specific makeup products that help people achieve the right translucent effect include liquid foundation, BB creams, and primer/concealer – all of which are soaring in popularity.

Kantar predicts that makeup that provides skincare or medicinal benefits will be a key growth area for the future. Various crossover products have already emerged between the skincare and makeup segments, such as toner cream that instantly brightens the skin. Positioning these products closer to skincare can be an effective strategy in China, where there remains a perception that the pigments in makeup could be harmful.

Men-only skincare is a major growth opportunity

The number of men using skincare products is also growing steadily across Asia, particularly in China, South Korea, and Thailand. They are buying in more categories as they add more steps to their beauty regime. However, most are still not buying products that have been created specifically for men. Products targeted at men contribute 10% of the total value sales for beauty in the region, but this segment is growing slower than unisex skincare brands.

“Men in their twenties are most likely to buy men-only skincare products, but as they get older they begin to use whatever products they find on the bathroom shelf,” continues Kang. “There is a substantial growth opportunity here for brands that can shift spend from unisex products to men-only variants, and prevent men from ‘lapsing’ as they get older, particularly for products promising oil control, anti-aging, whitening, and sunscreen benefits.”

Consumers crave products that are ‘just for me’

Shoppers in Asia believe that if a product is tailored to them, it will be more effective – and it also helps them to feel special. Customisation is rapidly gaining momentum in both skincare and makeup. Computer-aided diagnosis enables skincare brands to assess an individual’s skin and formulate a product that provides the benefits specific to that individual. Makeup with customised colours, textures, and finishes is also growing in popularity.

WATCH THE WEBINAR

Notes to editor:
The data and insights from this report come from the Worldpanel division’s Beauty Panel in Asia. This unique Beauty Panel tracks the usage and shopper behaviour concerning beauty products.

Fleury Michon, one of the leading brands of cold meats in France, worked with Kantar to understand this by using single-source data: looking at the same group of people to measure what they thought and then recording what they actually did. This provided very valuable insights which allowed them to make some significant changes to their range. As a result they were able to maintain their market position in a very competitive category.

THE NEED
PRIORITISING HEALTH
Fleury Michon knew that health was a growing priority for French consumers and something that their products needed to reflect. They needed to understand it better across all categories, and cold meats in particular, in order to plan for future growth.

THE APPROACH
ONE TRUTH
Households were interrogated about their attitudes regarding the food they eat at-home and out-of-home. Several groups of shoppers were found and described through purchase and usage panel data. This made it possible to target the people that Fleury Michon needs to retain and attract in the future.

This meant that the team had a clear read on what the target buyers thought and what they actually then bought. Combining this data as a single source was a very accurate way to understand the marketplace and it highlighted two distinct segments with a high potential for healthier products.

The next stage was to send a survey focused on cold meat to evaluate how risky it was to switch all their current range into a less salted one.

Kantar proved that there was a large opportunity for a reduced salt product as long as the consumer perceives the same composition, taste and price as the original. The analysis revealed that a third of current category users could be encouraged to buy more frequently. As a category with low brand loyalty, it was important that Fleury Michon moved quickly to meet this need before a competitor filled the space. A second opportunity existed in the most premium segment for people who wanted to use cold meat as an ingredient. For these people, the quality and origin of the meat was a key motivator so Fleury Michon needed to communicate about the organic credentials of their products.

THE IMPACT
PIONEERING FOCUS
As a direct result of this project and what they learnt about the market, Fleury Michon re-launched the biggest part of its range of cold meats in April 2019 to either have no nitrate salt at all, or a significantly reduced level.

In order to capitalise on the most premium level of buyer that was identified by the findings, they expanded their range of organically-produced cold meats.

These actions were pioneering for their industry and Fleury Michon have been able to maintain sales in a very competitive market ever since. The relaunch provided a platform for the organic range which has meant it has gained sales much faster than would otherwise been possible.

The 2019 Winners are:

• Innovation: Samsung
• Design and Style: Samsung
• Customer Satisfaction: Miele
• “Value for Me” award: Indesit
• Cross-category: Hotpoint
• Ones to Watch: Hisense & Haier Group

Piers Moore, Global Home Insight Director comments: “2019 has been an interesting year for home appliances as brands look to define what their vision of smart home looks like. It has also proven a challenge to define how connected appliances can service consumer needs and are not just another feature. Some brands are exploiting the opportunity better than others. Traditional European & American brands are under threat from Korean brands who are similarly under threat from Chinese brands. Haier’s shrewd acquisition of Candy has set it up for a solid Q4 and we expect it to pose a serious challenge across Europe next year. We also expect to see continued product & operational improvements in environmental and sustainability credentials from manufacturers in response to environmental protests that have pushed sustainability to the forefront of consumer mindsets.

In detail:

Innovation winner: Samsung

With consumers becoming increasingly aware of smart technology and Internet of Things (IoT), the demand for innovation permeates every part of consumers’ lives, including domestic appliances. As a purchase driver many consumers are looking to purchase brands that have (or are perceived to have) the latest innovations, so branding/communications/touchpoint messaging are key to converting customers as well as delivering on product innovation. Samsung wins on this key metric with over 18% of recent premium purchasers citing this as the reason for brand choice and is a brand position Samsung has managed to grow with. Other close contenders for this award are Electrolux (15%) and LG (15%).

Design and Style winner: Samsung

For discerning, style-driven consumers, Samsung seems to be the machine of choice with a quarter of all recent Samsung purchasers saying this was an important factor in their decision-making process. As a premium purchase maybe this is not surprising, so it is with some interest that Hotpoint at 21% is the second highest brand for whom design and style is important followed by LG at 20%.

Customer Satisfaction winner: Miele

An industry standard measure for customer satisfaction is the Net Promoter Score (NPS) It is determined by calculating the difference in % of Promoters (those who score likelihood of recommending: 9-10) vs Detractors (those who score likelihood of recommending: 0-6). Across the total of EU5 markets – France, Germany, Italy, Spain & UK – and all product categories, Miele has the highest NPS score of 27, which might not be surprising given that the premium end of the market often drives high satisfaction measures. However, Hisense has the second highest NPS just behind on 26. With only a recent launch in Europe by this Chinese manufacturer achieving such a high NPS this brand is definitely one to watch as NPS is a key driver in reducing churn.

Piers Moore said: “Miele’s appliance owners pay a premium for their product but are amongst the happiest owners, for the longest period and one of the most likely to be loyal (re-purchase same brand again). Miele’s consumers purchase for reliability and quality of materials and are rarely let down. Brands such as Bosch and Whirlpool are also impressive given the size of their brand share across Europe. If you look at Bosch it is in the top 3 for NPS in every category and tends to be in the top 3 for brand share. Incredibly impressive.”

“Value for Me” award winner: Indesit

Piers Moore explains: “It is important to remember that nearly 60% of all appliance purchases are below €500 and a quarter are below €300. The biggest driver of purchase is when a customer feels they got “Value for me”. The brand that delivers on this message at a great price point time and time again is Indesit. As a brand it has a strong position backed up by a product that delivers that message so that any customer in this space will be drawn to Indesit. A future contender for this award could be Beko – it is a brand that is growing share and delivers on the “value for me”.”

Cross-category winner: Hotpoint

Building brand ecosystems across categories and across regions is no easy feat. Sustaining that position as new entrants disrupt the market is even harder. Hotpoint is the brand with the highest multiple-appliance ownership over the last few quarters. Bosch, Miele and Siemens are all eroding this lead. In Q3 2019 Bosch and Miele have finally matched the Hotpoint level of multiple ownership at 59%. Watch this space to see if Hotpoint can hold onto this award next year.

Ones to Watch: Hisense & Haier Group

Both Hisense and Haier have the potential to disrupt the status quo in Europe. With less than 1% of total brand share across Europe, Hisense & Haier both still have low penetration. The impact of these Chinese brands across Europe however is starting to be felt as consumer understanding of the offer increases. Both brands have distinctive product offers and price appeal. A huge differentiator for Haier for example in refrigeration is the size of machine, for which 75% of purchasers stated this as an important reason for purchase, compared to the average for the category of 60%. Both brands are perceived to be innovative (10% – double the average) and good value (Hisense 35%, Haier 33%). Fisher and Paykel was acquired by Haier Group in 2012. In Australia this brand currently has the largest installed base (15% across all domestic appliances), is an important part of Haier.

Piers Moore comments: “This is going to be a focal point to watch next year as Hisense & Haier are taking different strategies but both making an impact in the market. Haier is performing well in France, but it is the acquisition of Candy Hoover that is of significant concern to many competitive brands in this market. The partnership is looking good and already benefiting both brands. Hisense is performing well in Refrigeration and regularly takes just over 2% of EU5’s rolling 12 months purchases, just over 3% in GB and even higher in Spain.”

If you'd like to learn more, please get in touch with our experts throuth the link on the right of this page.

Notes to editors:

These findings are based on Worldpanel ComTech, a longitudinal panel of 45,000 households in the EU5 markets of France, Germany, Italy, Spain and UK. Kantar monitors purchase trends, loyalty and switching over time for Washing Machines, Dryers, Refrigeration, Oven and Dishwashers.

FMCG Companies Ranking by consumer base (million households)

© 2019 CTR Market Research                                     Source: Kantar Worldpanel China

“Amid economic uncertainty, we continue to see big FMCG companies launch new products to win consumers who are more in favour of brands that promise to improve their health and lifestyle,” said Jason Yu, General Manager of Kantar Worldpanel Greater China. “While penetration may be reaching its limit in some categories, there is room to grow shoppers in adjacent categories or through acquisitions. Our data also suggests that companies can win new shoppers through premiumisation.”

In 2019, out of the 22 companies reaching 100 million consumers, 13 of them are Chinese companies. With the acquisition of Jiangzhong in 2018, China Resources entered the ranking for the first time, on the back of its strong brands Snow and C’estbon.

More sophisticated consumers

Chinese consumers are getting more sophisticated with a vast array of brands to choose from, making innovation more difficult than ever. With the highest mobile internet usage in the world (99.1% according to CNNIC report in June 2019) and 27.9 hours of internet usage per week, it is becoming more and more challenging to keep consumers’ attention, even with marketing campaigns that are highly engaging. Successful leading players either chose to launch more premium products to attract young middle-class shoppers or grow through expanding into new territories.

Go premium

P&G brands were bought by 92.5% of Chinese families in the latest year.

As the only personal care player in the top league, it managed to grow its shopper base year on year, propelled by its superior innovation and improved speed to market. On the back of Olay and SK-II’s success in 2018, P&G extended the proven product concepts to the personal cleansing category. In additional, P&G introduced premium lifestyle products such as Downy and Tampax, aiming to attract the new generation of shoppers who are willing to pay for premium quality. Home care, personal cleansing, and female hygiene products contributed to P&G’s buyer expansion increasing by 6%, 11% and 90% respectively. 

Expanding across categories

Launching products in new categories always presents both opportunities and risks to established players. YST, the leading beverage and nutrition player in China, has set a great track record of managing a wider portfolio of innovations across categories. It has grown strongly in the bottled water category through focusing on different drinking occasion: its functional drink brands Scream and Victory Vitamin water continue to grow their buyer base by 14%. In 2018, YST also launched “Yoseido” mask and facial moisturizer, aiming to capitalize on opportunities in the booming beauty sector. In 2019, YST grew its shopper base by an impressive 7%, far ahead of any other players in the rank.

Lower-tier opportunities

Lower-tier cities in China remain an important source of growth for FMCG players with the population here having increased disposable income, more leisure time and improved access to digital media and online shopping. Those cities also saw a faster rise in population growth due to migration from rural areas and first-tier cities. The success of Pingduoduo, now a key online player, proves that the underlying demand for consumption in those smaller cities can be awakened through effective marketing strategies.

Coca-Cola, which enjoys over 80% penetration in the top cities, is now advancing to lower cities to catch the wave of booming consumption. Overall the company expanded its shoppers from 73% to 74.4%, adding 3.7 million new consumers. Its penetration grew the fastest in county level cities by 2.8 points, driven by its carbonated soft drink products.

Haday, a Chinese seasoning giant, saw steady expansion of its buyer base in lower-tier cities, supported by its massive distribution network and affordable prices. It gained 5.3 million households from lower- tier cities in the latest year.

Convergence of online and offline

The retail landscape in China has evolved quickly in the last few years, featuring the rapid convergence of online and offline channels. Consumers are now able to access products of their choice by utilizing both O2O platforms such as JD Daojia, Taoxianda and Dmall as well as direct delivery from online platforms like Tmall and JD.com. An improved shopper experience through further integration of online and offline channels also brought new shoppers to brands.

Kantar Worldpanel reveals that despite the strong growth of the online channel, leading players can only sustain growth through an omnichannel strategy. For example, YST Group attracted 3.6 million new households through e-commerce and 8 million through offline channels. In total, YST Group increased its consumer base by 8.5 million. It proves that shopper growth in bricks and mortar stores is far from reaching its limit yet. Both Haday and Coca-Cola also attracted more shoppers through offline.

Market leaders such as P&G, Yili and Mengniu are all enjoying strong shopper growth through online channels as they try to make their products more accessible to Chinese consumers. Yet all of them enjoyed incremental shopper gains, indicating that manufacturers will have to build a holistic omni-retail strategy to avoid a zero-sum game.

Notes to editors:

Kantar Worldpanel China continuously measures household purchases over 100 product categories including cosmetics, food and beverages and the toiletry/household sector. Its national urban panel covers 20 provinces and four municipality cities (Beijing, Tianjin, Shanghai and Chongqing).
Mengniu includes Yashili, Biyou from Danone.
Nestle includes Yinlu, Hsu Fu Ch and Totole.                                       
Mars includes Mars and Wrigley.                                  
Colgate includes Colgate and Darlie.
Lower city tiers include prefecture level cities and county-level cities & counties.
China Resources exclude Vanguard and Pacific Coffee.
YST Group includes Nongfu Spring.

Charlotte Scott, consumer insight director at Kantar comments: “Overall shopper frequency rose by 2.2% in the latest 12 weeks compared with last year, suggesting an increase in people shopping around for the best deals. This phenomenon is in no small part thanks to the popularity of the discount supermarkets – their comparatively smaller product ranges mean shoppers often visit them in conjunction with other stores where they top up on specific items.”

While overall market growth remained strong at 2.6% this period, that is marginally slower than last month’s figure as consumers dialled back spending ahead of the run up to Christmas.  Charlotte Scott continues: “The slight deceleration in the past 12 weeks is largely down to shoppers being wary of spending and holding back slightly ahead of the big Christmas rush. This month saw price per pack drop by 1%, indicating that customers traded down in order to manage their spend. However, with Halloween now finished, we’re already seeing evidence of people getting in the festive spirit as 6.5% of us have bought a mince pie – worth €383,000 to retailers so far this year.”

While inclement weather can typically dampen moods in the grocery sector, recent rain has failed to make too much of an impact. Charlotte Scott says: “Retailers have responded well to this year’s cold and wet October by pushing additional sales of classic winter warmer categories. Fresh soup grew by 9.9% this period, while hot drinks are up 7.7%. Biscuits also benefited from those additional cups of tea and coffee, growing at 2.9%, with Tesco reaping the most reward from the trend, as biscuit sales at the retailer grew by 10.8%.”  

Overall it has been a strong month for Tesco, which was the only retailer to accelerate growth in the latest 12 weeks, increasing sales by 1.5%. It remains the third largest supermarket in Ireland with a 21.1% share of the market, just behind SuperValu at 21.2%. Both retailers performed well over Halloween, recording an additional €6 million of confectionery sales collectively.

Dunnes’ growth of 4.4% was again the fastest among the three biggest retailers. Ireland’s largest supermarket also increased its market share by 0.4 percentage points, bringing it to 22.8%. Dunnes will be anticipating further growth as we enter what is traditionally its strongest time of year. Charlotte Scott explains: “Typically Dunnes performs well during the festive season as shoppers trade up and are willing to spend more on premium items. Last Christmas the retailer recorded its highest market share since March 2013 and having been top of the retailer rankings for over a year now, it will be looking to break that record this December.” 

Aldi and Lidl enjoyed the fastest growth in the market this period, with sales increasing by 9.6% and 4.9% respectively. Shoppers visiting stores more often in the latest 12 weeks was key for both retailers, as new offers tempted people through their doors. Charlotte Scott continues: “Aldi has placed increased focus on brands in recent months, and as a result branded sales have increased by 34.2%. These items now make up 10.8% of spend at the grocer, compared with just 8.8% this time last year.

“Lidl meanwhile has looked to capitalise on the growing popularity of meat-free alternatives by introducing vegan burgers and sausages to stores across the country. It’s no wonder the retailer sees potential in this market, some 40.4% of shoppers bought a vegetarian product in the latest 12 weeks while meat-free burgers and grills have grown by 7.7% year on year.”

By working with the Kantar team, Florette were able to achieve a much deeper understanding of how bagged salad is consumed. Additionally, they were able to shape new products and messaging to target moments that offer opportunity to brand, retailer and category.

THE NEED
COMPELLING GROWTH
Florette were keen to look at opportunities to grow the category and their share of it. To do so they needed to create a compelling, evidence based innovation and marketing plan not only for themselves, but also to engage their retail partners.

THE APPROACH
SEGMENTING SALADS
After some initial exploratory work, it was clear that a better understanding was needed of how bagged salads are consumed: who by, when and what with. By using Kantar’s food Usage panel it was possible to answer these questions. The team then applied analytical techniques to convert this mass of complex data into a set of actionable segments that explained the eating occasions for bagged salad. This helped not only to illustrate current eating habits, but to identify opportunities for the future as well.

The segmentation was delivered to Florette through a combination of meetings and workshops within which the teams worked together to identify potential new products that they could create and the marketing actions which would support their growth.

The deep understanding that was achieved by the segmentation work helped to change Florette’s mindset in terms of the role their products play or could play in the future. It made it possible to identify the meal and cuisine types that are most important, the needs that consumers are trying to fulfil and the role that salad plays. It also explained which people are suitable as targets for specific products and the messages they would be receptive to.

As part of this project, the strengths and weaknesses of retailers in each of the segments were quantified as well as the formats and salad types that would be best suited to them. This helped to build compelling stories that Florette could share with the retailers.

THE IMPACT
CREDIBLE RESULTS
Florette took the segmentation work and used it as foundation for their entire category strategy. As a direct result they introduced several new products to their range, which quickly achieved listings at Tesco and later other major retailers. One of the products, which was named “Summer Mix”, achieved sales of £200,000 within just a few months of launch with a projection to reach £750,000 by the end of its first year.

Florette’s marketing agency integrated the learnings into their work which included revised messaging both on the website and packaging to help drive usage.

The segmentation framework which was introduced, and the new way of thinking about the bagged salad occasion, was used with retailers which helped to strengthen the brand’s credibility. Florette were able to advise both Tesco and Sainsbury’s on criticalstrategic decisions such as fixture layout, in-store communications, ranging and their approach to gondola ends, a key driver of impulse purchase.

Overall the project re-energised Florette’s business and helped them to understand what they needed to do to grow in the future.

Our upcoming publication Beauty Trends in Asia looks at how the overall perception of beauty is in transformational mode with the changing lifestyle of Asians. It also showcases a unique segment on the increasing importance of male grooming and top recommendations for beauty brands to win new customers.

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Launched today, major trends uncovered by the study reveal:

Digital is delivering for the takeaway sector

• Delivery and take-away are rapidly growing their OOH share. Across the UK, France and Spain they now account for 12.3% of total outside the home spend.
• This growth is being heavily influenced by the introduction of new technology for food deliveries, which is significantly increasing spend per meal.
• As a result, the gap between price of home cooked and takeaway meals is widening. France is the starkest example, where price increases from €4.70 per meal when food is prepared at home to €17.70 when ordered for home delivery or take-away; UK €4.20 to €16.20 and Spain €4.00 to €15.30.

Speciality coffee culture is booming

• Appetite for hot drinks on the go shows no sign of abating, with the UK (44%) and Spain (43%) leading the way in percentage of wallet share.
• Coffee represents 80% of spend globally within the hot drinks category, with the UK accounting for 51% of that value.
• People are moving to more expensive, newer coffee offers which have a higher price index; in the UK, 19% of consumed coffee is a speciality drink in 2019 compared to 7% in 2017, with flat whites accounting for 7% of consumption.

Maria Josep Martínez, Global Director Out-of-Home and Usage Foods, Worldpanel Division, Kantar, commented “Continued economic uncertainty appears to be having a minimal impact on consumer wallets, with customers willing to spend their money in takeaway and food delivery rather than cooking at home. While this is actually adding value for the entire OOH market, this clearly remains a threat to traditional retailers who must consider different strategies for capturing OOH growth in 2020 and beyond. For those willing to take on the challenge, the rewards will be significant.”

Data for ‘Winning food & drink occasions Out-of-Home’ report was gathered using Kantar’s unique mobile app which records every snack and non-alcoholic drink bought for consumption outside the home—whether that’s on the go, at the place of purchase, in the workplace, or otherwise. To create a comprehensive view of the OOH market, the study looked not only at what products are purchased – and where – but when the purchase was made and whether it was for sharing or for individual consumption. Information for the report covered ten markets globally: Brazil, China, France, Indonesia, Mexico, Portugal, Spain, Thailand, the UK and Vietnam.

Download our new publication, watch the webinar or contact our experts through the buttons at the right of this page and discover what brands can do to grow out-of-home.

This period saw an increased focus on seasonal events and promotions, as Fraser McKevitt, head of retail and consumer insight at Kantar comments: “The final quarter of the year is associated with holidays and festivities, and retailers are always looking for ways to capitalise on seasonal events to attract shoppers. This year pumpkin sales were up by 6% in October as the public geared up for Halloween – with more than a tenth of British households taking one home. In the past decade pumpkin sales have increased by 62% – a telling barometer of how retailers have found success by increasing focus on seasonal spend.”

Following Halloween, consumer and retailer attention has already turned to Christmas, with £17 million spent on mince pies and £3 million on Christmas puddings so far this year. Fraser McKevitt continues: “It’s never too early to start thinking about Christmas, particularly for grocery retailers. With many supermarkets already unveiling their festive advertising campaigns, the starting gun has been fired on the race to be Christmas number one. It should come as no surprise to see the grocers jostling for position early – with the average household expected to spend more than £380 on groceries during December. In total, shoppers will spend nearly £11 billion in that month alone, showing how it’s a crucial period for retailers.”

Co-op has grown continuously since May 2018 and sales increased again this period with year-on-year growth currently standing at 4.4%. Fraser McKevitt explains: “Co-op welcomed an additional 274,000 shoppers through its doors in the past 12 weeks – fruit and vegetables proved particularly popular as fresh produce sales increased by 10%. The retailer stayed true to its convenience-focused roots as chilled items like pizza grew by 8%, helping to increase its market share to 6.5%.”

Lidl recently announced its intention to open over 200 new stores in the next three years and was the fastest growing bricks and mortar retailer this period with sales up by 8.8%. It has made a concerted push to encourage larger trips this year, and its vouchering scheme helped to boost several ‘big shop’ categories, including alcohol where sales rose by 18%. Fellow discounter Aldi also won market share, with sales growth of 6.7% and now accounts for 8.0% of grocery sales. Aldi boasted the fastest growing premium own label line on the market – its ‘Specially Selected’ range grew by 17.2%.

Slowing growth in the overall market meant the four largest retailers struggled to make gains.  Sales at Asda and Morrisons fell by 1.2% and 1.7% respectively, while Sainsbury’s and Tesco proved slightly more resilient. Fraser McKevitt says: “After a positive month last time around, Sainsbury’s sales were down by 0.2% in the past 12 weeks, with its market share falling back slightly to 15.6%. Meanwhile, Tesco saw sales fall by 0.6%. The UK’s largest supermarket recently unveiled its new ‘Clubcard Plus’ offer which gives subscribers 10% off two large shops each month. Some 1.8 million households made at least two trips to the retailer worth £50 or more in the past four weeks, a number Tesco will be looking to boost through its latest initiative.”

Iceland’s market share stayed level at 2.1% following sales growth of 1.6% this period. Fraser McKevitt elaborates: “Iceland sought to reinforce its reputation as a community-conscious operator this month by offering members of the Armed Forces and NHS staff a 20% discount for a limited time. Coupled with its commitments around plastic waste and palm oil in the past 12 months, the campaign shows a growing focus on community and sustainability issues at the retailer.”

Elsewhere, Waitrose sales declined by 0.9%, taking its market share to 5.0%. Meanwhile online specialist Ocado was again the fastest growing grocer, with sales up by 13.5% compared to a year ago.

A market in rude health

Today, 69% of French people aged 18 and over make an annual average of 19 orders of a physical product on the internet, worth an average amount of €57 (year to September 2018). In total, this online expenditure represents over 660 million orders, generating turnover of €38 billion. In other words, for physical goods excluding travel, this means equivalent growth of 14% year-on-year. Young people aged under 35, residents of towns with fewer than 20,000 inhabitants and women are the population segments that are making the greatest contribution to the development of internet trading activities. Those aged 65 and over aren’t being left behind though, 48% of them make an average of 11 online purchases per year. Amazon is the absolute number one when it comes to e-commerce in France, with a market share of 17.5% for physical goods. It is followed by Cdiscount, which is in second place with 6.9% of the French market. A subsidiary of the Casino Group, Cdiscount has historically enjoyed a strong position in technical goods and household appliances.

Amazon, the undisputed leader 

With €6.5 billion of purchases made this year, Amazon remains the most widely known general e-commerce site in France. It is very popular with its customers, winning their trust and ensuring their satisfaction, both through its services and the great choice of products on offer on the site.

With growth of almost 29%, while e-commerce has ‘only’ grown 14% in France, the company shows no signs of slowing down. Kantar estimates that 20 million people placed an order with Amazon in 2018, 1.3 million more than in 2017. Amazon’s market share can be split into two parts: ‘direct’ sales, which represent 46.8% of the expenditure generated on the platform, and marketplace sales managed by the US distributor, totalling 53.2% of the whole.

Conquering the food market

While Amazon may be the leader in most sectors (technical goods, culture, etc.), it is the food market where it continues to lag behind to the greatest extent. Its market share is only 1.8% of the 100% e-commerce whole. By way of example, this is 24 times smaller than that of E.Leclerc Drive. The delivery services offered by Amazon: Prime Now for free delivery and Pantry for everyday shopping, still fall far short of covering the needs of French people. On the one hand, they are not available everywhere and on the other, delivery of fresh produce is limited since Amazon Fresh is not yet present in France. 

However, the threat is there. Amazon, which has no intention of missing out on the 170 million baskets generated for online mass consumption purchases, represents genuine competition for the traditional companies. Even though the partnership signed with Monoprix has not yet taken effect, Amazon already has more customers than a site such as Carrefour.fr or all the drives implemented by the Auchan Group in the food sector. Although the level of frequency of purchases at Amazon is still currently fairly low, this threat does not only concern e-commerce. With Amazon Go, its checkout-free concept which uses Just Walk-in technology, Amazon is also seeking to be a pioneer of the physical store of the future.

Fashion: the leading sector for online purchases

Just three sectors represent over 50% of the online mass consumption purchases of French people: food in the broadest sense, multimedia and fashion. The fashion sector—including accessories, jewellery, shoes, clothing, lingerie and footwear—represents 16.8% of the purchases of goods on the internet across all sectors. Fashion alone generates €6.4 billion in turnover. Today, 47.6% of French people purchase fashion items on the internet. They spend an average of €269 per year. This particularly dynamic sector has generated a flow of 137.9 million fashion item orders in France, i.e. a rise of 15% since the end of September 2018. This equates to an average of two items per order, with an annual rate of 5.9 orders per consumer. In 60% of cases, these orders are subject to home delivery. Fashion purchases made in marketplaces are increasing dramatically (+ 29%). The latter also have considerable potential for growth since they represent no less than 9.4% of the whole spectrum of online purchases.

Online fashion – a fragmented sector

Of the marketplaces on the market, Amazon is obviously a major player, with 50% of its fashion turnover generated through this channel. With 5.6 million people making fashion purchases in the year to September 2018, Amazon has become the leader this year with 8.5% of market share, namely around €585 million in turnover. Amazon is planning to employ significant resources to establish its legitimacy and build a compelling offer in this sector. It is thus developing its own services, such as Prime Wardrobe in the US, which enables consumers to try on items before making a purchase. In autumn 2017, the site launched its Find men’s and women’s clothing brand and, more recently, an entirely new brand entitled Truth & Fable, dedicated to evening and special occasion wear for women. 

Private sales are the second largest player in the fashion sector, with market share of 7.7%, followed by Zalando, Showroomprivé and La Redoute, the former leader in the sector. Still fragmented, the online fashion sector is currently in a consolidation phase, since the top 15 websites in the fashion world currently make up almost 50% of fashion purchases on the Internet in France.

Notes to editors

This article was published in our Insight Book 2019.

For any citation of data: Source Kantar - E-commerce Panel - MAT data October-September 2018 

Methodology: E-commerce: a unique insight into business conducted on the web

The key information in this analysis was extracted by the E-Kommerce panel, the solution launched in 2016 in France by Kantar to analyse Internet sales activities. E-Kommerce is the leading consumer-centric panel, comprising 12,000 individuals, representative of French people aged 18 and over, able to provide continuous monitoring of the purchases of physical goods (excluding services made online.) This new solution enables precise measurement of the performances of actors on the web (sites and marketplaces) according to the behavioural levers they activate: number of customers, frequency of purchases and size of baskets, loyalty, mix of purchases among sites, and by detailing the profiles of their customers and the performances by sectors and by product categories.

Saigon Co.op had for many years been the leading retailer in Vietnam. However, they were starting to suffer a decline in share. New competitors were entering the market, attracted by a young population with growing consumption needs and rising incomes. The retailer worked with Kantar to gain a better understanding of their customers’ changing needs. This revealed some key ways to reinvigorate growth which were highly successful.

THE NEED
REVERSING DECLINE
Saigon Co.op needed help to understand why their market share was declining. Their competitors were opening new stores and consistently winning more customers. They wanted to understand their shoppers better to know what they should change in order to grow again.

THE APPROACH
CHARACTERISING SHOPPERS
Kantar has had a household purchase panel in Vietnam since 2002. This makes it possible to look back at data over a long time period in order to understand how people shop and what has changed. In addition to reviewing data about purchase behaviour, shopper demographics and ownerships, specific questions were asked of the main shopper in each household to reveal more about their attitudes to the different retailers and to gauge their level of engagement towards them.

By combining these sources of intelligence and segmenting on shopping patterns and attitudes it was possible to identify specific groups of shoppers. There were three main drivers behind which retailer was chosen: the price the shopper was prepared to pay, how convenient the store was and the range on offer. Taking these drivers into account, the shopping behaviour of Vietnamese people was characterised across six unique types:

• Premium shoppers
• Convenience seekers
• Explorers
• Value seekers
• Pro-active shoppers
• Simplicity seekers

The team used this model to assess the strengths and weaknesses of the Saigon Co.op business. They discovered, when looking at the size of each segment and comparing it to the share held by the business, that the retailer was missing out on both premium shoppers in Ho Chi Minh city and convenience seekers in Hanoi. Both of these were sizeable and growing shopper groups that needed to be targeted for future growth.

THE IMPACT
PREMIUM FOCUS
Saigon Co.op were very receptive to these findings and took the decision to improve upon their offer across the board, both in terms of the stores themselves and the products that they stocked.

The business decided to launch a new, premium offer called Finelife to target high-income shoppers. They also expanded their presence in Hanoi with the opening of eight new mini-mart stores. Finally, the business developed a guidebook to be used across their network for internal communications to ensure they were talking to their target shoppers in a consistent and relevant way.

These actions are forecast to generate an additional USD 17 million in revenue for the business in the first year and are a clear sign that the Saigon Co.op is a reinvigorated business ready to move into the next exciting chapter of growth.

THE NEED
IDENTIFYING OPPORTUNITIES
Nestlé has a range dedicated to babies under 36 months for all occasions through the day from breakfast to dinner. They are sold as ambient products which don’t need to be kept in the fridge.

Nestlé is the leader in the ambient dairy segment of baby food. Their main challenge was to compete with non-baby food products in the dairy market, for example, chilled yoghurts and desserts.

Consequently, Nestlé needed to better understand babies’ consumption not only of foods directly targeted at them, but also of chilled dairy products in order to create something that specifically met their nutritional needs.

THE APPROACH
THE DESSERT OCCASION
Understanding the needs of such young consumers is far from simple and not something that can be easily accessed from a lot of data sources. In this case the team were able to access Kantar’s Food Usage data. Usage enables us understand beyond what was bought to know who consumed it, when and what with. The panel in France is run continuously 52 weeks of the year looking at the behaviour of people in 13,000 households annually. This rich source of data was analysed to understand the dairy consumption of 12-35 old month children to try and spot new opportunities.

By looking at the eating occasions for desserts, the team were able to identify the range of products that babies were consuming. Along with yoghurts, fromage frais and other products, babies were also consuming “flans”, an egg custard type of dessert, but there wasn’t a dedicated version just for babies. This led the Kantar team to recommend that Nestlé created something specifically for this very special audience.

THE IMPACT
A TOP INNOVATION
Having identified the opportunity with usage data, the team at Nestlé conducted some additional ad hoc studies in order to develop a new product range, the P’tit Flan, especially created for babies. P’tit Flan was created without preservatives or colourings but containing protein and 87% milk which made it ideal for babies under 36 months. It was also made with 30% less sugar thanthe average flavoured-milk dessert.

Like the other products in the range, P’tit Flan doesn’t need to be kept in the fridge, which makes it an ideal choice for mothers who want to take food out with them and offered a point of difference with the non-baby food competitors.

Within five months of its launch in April 2017, P’tit Flan had reached an 11% penetration rate among families of young children with 29% of people repeat purchasing. It was one of the top three innovations in the category of the previous four years (2013-2017).

Featuring expert views, case studies and practical insights, Show me the Shoppers uncovers how to convince more shoppers to buy your brand.

The building blocks for brand growth

Once you've established that brand growth comes from new shoppers, and set a realistic target, it's time to explore routes to growth in your heartlands:

• Increasing the availability of your products 
• Winning head to head with your competition
• Being chosen in more consumption moments
• Playing in other categories

Going beyond grocery

The size of the prize could be even bigger if you look outside your traditional selling spaces to find those elusive shoppers beyond grocery. There’s 21 billion opportunities for your brand to be purchased in any given year, and most brands are only considering half of them.

The average Brit goes to the supermarket four and a half times a week. This doubles to nine times a week if all other shopping trips are included, and increases to ten or eleven with the addition of online purchases. 

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Download your copy of Show me the Shoppers today and get in touch to find out how we can help you find growth in and out of the box.

In this Asia Consumer Insights edition we focus in these two Muslim majority markets jointly with other topics:

• Q2 2019 Asia FMCG Overview
  • Asia FMCG achieved a healthy growth by +4.8% in Q2 2019, slightly stronger than Q2 2018.
  • Non-food sector, including both home care and personal care, continues to lead the FMCG market growth in Asia.
    
    
•  The spotlight of the quarter
  • FMCG performance during Ramadan creates a sizeable uplift among Indonesians, while a soft decline in Malaysia.
  • Uncovering major similarities and differences between Indonesia and Malaysia to optimise strategies in order to win consumers in Ramadan.

Download our quarterly paper and get a full picture of the key FMCG performance indicators, consumer insights, trends and opportunities across Asia.

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The non-food category continues to be the main growth engine, with personal care products reporting a strong increase of 12.4% in sales value, driven primarily by younger families and evolving lifestyles. Packaged food saw a mixed performance but categories with health and wellbeing benefits continued to do well. Also, urban Chinese households spent 8.8% more on fresh food, especially fruit (+7.8%) and pork (+21%) respectively.

Modern trade (including hypermarkets, supermarkets and convenience stores) slowed down, posting a growth rate of 1.7%, although all four regions except the western region are seeing a stronger recovery momentum. Hypermarkets continued to struggle during Q3, experiencing a penetration decrease of 3.3ppts versus the same period last year. E-commerce remained a bright spot with high-speed growth of 36.2%.

Leading Grocery Share of Modern Trade - National Urban China 

*Suning Group includes Carrefour

© 2019 CTR Market Research    Source: Kantar Worldpanel China

Local retailers embrace O2O services

Sun Art Group maintained its leading position and stopped declining in Q3. The retail group represented 8.3% of FMCG modern trade’s value share in the latest 12 weeks and has been investing heavily in digitalization, which is starting to pay off. The one-hour delivery service “Taoxianda” improved both frequency and customer loyalty. During the “6/18” promotional event, RT-mart reported over 1,000 daily orders per store. Sun Art also restructured their hypermarket stores by increasing the number of fresh food stock keeping units (SKUs) and developing ready-to-cook and ready-to-eat products to enhance their competitiveness as shoppers’ lifestyle evolve.

In Q3, Carrefour slowed its decline to -5.3%. During the last quarter, Suning has announced the completion of its acquisition of Carrefour and moved swiftly to consolidate its operation first by opening 200 Carrefour stores to sell home appliances and electronic products. Suning also plans to export its supply chain and digital operations capability to Carrefour to help it compete more effectively in lower-tier cities. On the back of the physical presence of Carrefour and Suning’s smart-retailing infrastructure, the enlarged group now holds 3.2% value share of China’s modern trade.

Metro AG retreats from China while Costco/Aldi still in expansion mode

Among the top 10 leading competitors within modern trade, Walmart remains the only global player. On October 11^th, German wholesaler Metro AG also agreed to sell a majority stake in its Chinese operation including 97 stores to local giant Wumart as well as its technology partner Dmall. The move will help Wumart further expand its presence at a national level and leverage Metro’s excellent sourcing capabilities. 

Despite severe pressure facing global retailers, US warehouse club operation Costco and German discounter Aldi remained cautiously bullish about their expansion in China. When Aldi opened its first store in August, many shoppers in Shanghai flocked to the store to benefit from the deep-discount promotions and Aldi saw more than 200,000 shoppers sign up to their membership program. Aldi’s opening day actually made the headlines as the store had to be closed for four hours due to overcrowding. Costco just announced it will open a second store in early 2021, also in Shanghai. Aldi however, is taking a different approach to adapt to the Chinese market, opting for smaller stores that are equipped with a WeChat-based CRM scheme and delivery options. Aldi will open two more stores in Shanghai in October.

Both Aldi and Costco used Tmall Global as a launchpad to test the water and gain more insights on Chinese consumers. They focus on private label products which can sell at a lower price but superior quality. With their distinctive value proposition and imports as main draws, both players are yet to secure long-term success in China where shoppers are less loyal to particular stores and have plenty of choices both offline and online.

Alibaba went from strength to strength

Despite a tough overall trading environment, the online channel experienced a 36% growth in sales, far outstripping other channels. Over half (58%) of Chinese shoppers bought FMCG online in the last 12 weeks with an average frequency of 4.6 times and average spending 115RMB per trip.

Alibaba maintained the leading edge with a third of the Chinese urban population making an FMCG purchase through its platform. It recently acquired cross-border e-commerce platform Kaola from NetEase for approximately US$2 billion to further enhance its market position in imported products. Driven by its lower-tier city success and content-driven live-streaming platform, Alibaba is well positioned to further grow in the Chinese retail space. At its latest investors’ conference, Alibaba unveiled their five-year goals for the Chinese consumer business which is aiming to serve over 1 billion consumers and top 10 trillion RMB Gross Merchandise Value (GMV) by 2024.

This means that in 2019, 41 million lunches and dinners weren’t made in Spanish households, not because people are eating less, but because new consumer options have been sought. Seven out of every ten meals no longer cooked at home were consumed in a restaurant, the other three, although eaten in the home, were not actually cooked there. These meals were takeaway meals delivered to the home or picked-up, or ready to eat food bought from a convenience store, hyper or supermarket.

This change in behaviour when it comes to cooking or seeking out convenience food has not increased the number of consumption occasions. However, it has brought added value to the food and beverage sector* which has grown by 3% in the first half of the year: a meal made by a restaurant costs on average €8.40 per person and a delivery or takeaway order around €5.10, as opposed to €1.60 per dish made at home.

It has also impacted the evolution in product categories as the meals selected in each of these options are noticeably different, something which has spurred the growth of the best-positioned products and brands in the restaurant, delivery and/or takeaway businesses.

In search of the natural and new lifestyles

The report, which for the first time includes a complete overview of food and beverage consumption both inside and outside the home, also noted some other trends in Spaniards’ diets. The 'realfooding’ concept (the search for naturalness in food and drinks) is making great strides among consumers. Natural products are regularly chosen by 81%, while 60% are even giving up processed foods such as fat (65%), salt (52%), sweeteners (43%) and sugar (34%).

But that is not the only trend on the rise amongst the Spanish. Flexitarianism is growing in home consumption, although not when it comes to eating out. The drop in the consumption of animal proteins at home is exclusively reflected in beef and sausages, which have lost more than 1.5 points in their share of stomach over the last six years.

“Spanish consumers are changing their patterns of consumption and seeking out products, packaging or channels that provide them with greater convenience and ease in their daily lives,” says Edurne Uranga, Kantar Consumer Director and expert in consumer food and beverage habits. “However, at the same time, they are not giving up their search for what’s natural in their choices. Understanding this and adapting to their needs opens up a new world of great opportunities for us.”

*Food and beverage expenditure (In & Out): includes all purchases for consumption both inside and outside the home and in any channel: supermarket, hypermarket, restaurants, delivery, takeaway, etc.

Period: Q1+Q2 2019 (vs. Q1+Q21H 2018)
Source: Kantar (Worldpanel Usage)

Dominic Sunnebo, Global Director for Kantar comments, “Q3 2019 saw Apple launch its new iPhone 11 family and with just over a week of sales available, the new models contributed to 7.4% of Apple’s overall iPhone unit sales in Q3 2019, up from 6.6% from the launch of the iPhone XS family in Q3 2018. The new models are all selling well, with the more competitively priced iPhone 11 is leading in absolute terms, but the Pro models are not far behind. Combined sales of the new models are up vs. the iPhone XS launch a year ago. In the US the model split of sales for the new iPhones is similar to the EU, though the overall contribution to Apple’s total iPhone sales in the quarter is notably larger at 10.2%."

Samsung also saw strong growth in the five major European markets, with share hitting 38.4% in Q3 2019, up +5.9%pts vs. Q3 2018.

Dominic Sunnebo continues: “Whilst the flagship Note 10 series launch provided a boost to Samsung in Q3 2019, it is the highly competitive new A series which has launched Samsung share to its highest share since in Europe since Q3 2015. New A Series models account for five of the top ten best-selling models in Europe and account for the entire top 3; #1 A50, #2 A40, #3 A20e. For years Samsung has been searching for an answer to Huawei and Xiaomi in Europe and the new A series has finally hit the mark, proving hugely popular with consumers across numerous price brackets."

Having previously chosen to overlook the majority of the A series portfolio in the US, Samsung has used its new revitalised A series range to address a gap in its mid-tier offering, with the A10 and A20 selling well. With Google looking for white space with its Pixel 3a and 3a XL models and LG having little competition in the low and mid-tier, Samsung has immediately confronted these threats.

Apple share fell slightly in China, the world’s largest Smartphone market, down -1.3%pts. The pendulum continues to swing towards home grown Chinese brands, who accounted for 79.3% of sales in the Chinese market in Q3 2019. Huawei and Honor combined made up 46.8% sales share, maintaining its dominant position from the previous quarter, helping to cushion the impact from the US – China trade spat.

While 57% of men worldwide claim to maintain their appearance, this falls to only 44% for British men. At the same time a fifth of British men say they make no effort to do so – significantly more than the global average of 11%. 

Alex Foch, personal care specialist at Kantar, said “British men are not only the least concerned about their appearances globally, they are actually going against the trend by becoming less involved in their personal care routines. The number of British men categorised as heavy users has dropped 2 percentage points on last year to 19.4%, with a knock-on effect on personal care brands in the region – British men are using 14% fewer weekly personal care products than the average man globally.

“In contrast, Italians, Spaniards and Americans are all increasing their use. If these globally recognised trends aren’t enough to sway British men it suggests their habits are more than skin deep – so while the scale of opportunity for brands is high in the UK, it’s going to take some more effort to crack this market.”

The number of men who say they like to spend lots on beauty products has risen worldwide from 17% in 2015 to 21% today. In addition, heavily involved men – defined as the 20% most engaged users of personal care products – are 4% more likely to say that they do whatever they can to look young, 3% more likely to spend lots on beauty products and 3% more likely to buy the latest brands and products. 

Alex Foch continues: “Globally, it’s a promising picture for beauty brands and manufacturers.  Men are increasingly comfortable buying, using and enjoying grooming and care products and they’re developing a better knowledge of what’s on the shelves. However in some places it’s still a bit more challenging. In Great Britain, for example, many men simply haven’t been convinced of the need for personal care products in their lives. Brands should take a step back and think about new ways of enticing them into the sector. If men think expanding their grooming regime is going to eat into their valuable free time they won’t do it, so ease and convenience have to be high on the agenda – and if a product has an overly ‘macho’ look, it could feel dated and unappealing to the modern British man. 

Brazilian men are counter to the untidy Brits, and are 87% more likely than the global average to experiment with facial hair, 61% more likely to buy the latest brands and products, and 36% more likely to say that their looks are important to them. This correlates with a more critical approach to personal beauty, with Brazilian men reporting far higher levels of concern around conditions like acne and greasy skin than the average man. 

The search for eternal youth

There’s a recognisable disparity in how much men around the world care about ageing, with British men once again the least concerned. Less than a quarter (23%) say they are bothered about looking young, in comparison to 58% of Chinese men and half of Italian men. 

While German men rank among the bottom four when it comes to the importance of looks and having a youthful appearance, they are considerably more likely to be found splurging on their personal care routines – 68% say they like to spend lots on beauty products versus a global average of 21%. And, despite being known for their cultures of personal care, American and French men are the least likely to want to splurge, with only 10% and 11% of men pointing to a high level of personal care spend – suggesting they view personal care not as a necessary expenditure rather than a nice-to-have.

This time 12 months ago Dunnes overtook Tesco to become the nation’s number one grocer, and it is showing no signs of slowing down. The retailer currently holds a 1.3 percentage point lead over its next largest competitor, the biggest differential it has enjoyed since February 2019.  Charlotte Scott, consumer insight director at Kantar, comments: “It has been a big year for Dunnes.  Its continued success, evidenced by 5.5% sales growth in the past 12 weeks, has largely been driven by its Shop & Save voucher campaign."

SuperValu also enjoyed a marked boost in sales over the past 12 weeks, doubling its growth rate to 2.0% which helped it to overtake Tesco and become the second largest retailer for the first time since December 2018. The convenience specialist has enjoyed larger basket sizes and growth in some of its core categories, as Charlotte Scott explains: “Ireland’s two largest retailers, Dunnes and SuperValu, have both benefited from an out of season boom in sales of cleaning products. Shoppers have been indulging in a spot of seasonal ‘autumn cleaning’, perhaps thanks to the popularity of internet sensation Mrs Hinch and being kept indoors by the recent wet weather. Overall people have spent an additional €7.2 million on household cleaning in the past 12 weeks, which is up 5.9% on last year and driven by Ireland’s two largest retailers.”

Despite falling behind SuperValu in the retailer rankings, Tesco enjoyed a return to growth this period, with shoppers making an extra trip compared to last year. Confectionery has been a key category for Tesco, and is growing at an impressive 31.1%. Charlotte Scott elaborates: “Tesco individually accounts for 70% of the market growth of confectionery, which has increased in value by 9.9% in the past 12 weeks. The retailer’s promotion on tubs of sweets, pricing them at €3.99, has proved particularly popular and it has even had to put quotas in place to limit shoppers to a maximum of 4 per person. With Halloween and Christmas just around the corner, Tesco will be particularly encouraged by these results.”

Aldi reached a new record market share at 12.6% this period – continuing its strong performance and growing by 10.9%.  It has welcomed an additional 21,000 shoppers through its doors, with a particular push to target young families. Charlotte Scott continues: “Traditionally, Aldi’s core shoppers are young and mid-range families, with these customers still a third more likely to shop at the retailer than any other group. However, growth among these groups has slowed to 0.8%, as the cohort has cut back on its overall spending by 1.4%. In response, Aldi’s has brought back its popular Big Toy Event, aimed at drawing these shoppers back into stores, and offering something for the little ones.”

Lidl’s performance at a total level has also improved, with sales up 4.9% and its market share increasing to 11.9%. While the retailer’s existing shoppers are visiting more often, and spending more when they do, penetration has dropped slightly by 0.4%. 

The resulting piece of work was a deep dive into the motivations for purchase and feelings about the salty snack sector across the country. There were several hypotheses about the reasons for not purchasing such as affordability, availability and health concerns. The quantitative research identified some reasons that were rather different to what had been expected and led to the launch of two innovative new products.

THE NEED
IDENTIFYING CONSUMPTION BARRIERS
The team wanted to really get into the specific reasons for consumers’ choices in this category in order to map and understand the consumption barriers. There were a number of hypotheses to test out across different types of user in what is a very large and diverse market.

THE APPROACH
UNDERSTANDING A DIVERSE MARKET
Through its household panel, Kantar was already providing detailed information about Brazilian consumers’ purchase behaviour. To really tap into people’s motivations and attitudes, an additional questionnaire was addressed to a sample of panellist using LinkQ, Kantar’s questionnaire service. This way both types of data were captured from a single source, which allowed a completely integrated analysis to get the full picture.

The project was divided into two phases. The first phase segmented panellists into Light, Medium and Heavy buyers of salty snacks and also non-buyers. Every segment was very accurately explored in terms of demographics and shopping behaviour.

During the second phase, panellists in each segment were interviewed face to face to better understand habits, attitudes and to identify potential barriers. The survey revealed very promising new product development opportunities for PepsiCo to offer alternative healthier salty snacks.

THE IMPACT
RESPONDING TO UNTAPPED NEEDS
PepsiCo has vision of Winning with Purpose and clear goals for food nutritional enrichment and portfolio expansion to be met by 2025. As a result of the insights gathered about their target consumers, PepsiCo created two new products – both of which were true innovations in the country. They sought to answer the previously untapped need for a healthier salty snack product.

• Fandangos Integral is the very first wholemeal salty snack in the category in Brazil. It’s roasted rather than fried offering a healthier option to consumers.
• PepsiCo also launched a new version of Elma’s Batata Palha – a popular type of crisp in Brazil in the shoestring (shape of small matchsticks) segment. This new version was without salt, the first product of its type to do this.

Both launches were very successful and contributed to the overall strong performance of PepsiCo’s innovations. Across the salty snack market, 92% of successful innovations (475,000 buyers or more) are from PepsiCo, more than double that of any other company. Fandangos Integral was the third most incremental launch in the last two years in the entire Salty Snacks category. It achieved a 1% penetration across the country within the first nine months. To put this into context, Kantar data reveals that only 1% of global launches achieve this in their first year in market.

Fraser McKevitt, head of retail and consumer insight at Kantar, comments: “The grocery market seems to have finally edged out from under the shadow of 2018 and tough comparisons with the strong summer sales of last year.  Sainsbury’s performance reflects this – increasing sales at its fastest rate since October 2018 to make it the only big four retailer to achieve growth.  The grocer recently announced plans to phase out its value ‘Basics’ line which made it into 12% of shopping baskets during the past 12 weeks, so it will be interesting to see how replacement brands like ‘Stamford Street’ and ‘J James and family’ fare as they become more widely available.”

As growth accelerates in the overall market, Brexit uncertainty continues and Fraser McKevitt explains: “Well-documented concerns about the availability of popular products in the event of a no-deal Brexit have not yet translated into a consistent increase in purchasing. Sales of dry pasta and healthcare products over the past four weeks were 9% and 7% higher than the same time last year, but those of canned products fell by 2% and frozen food by 1%. While a quarter of British consumers say they are considering stockpiling*, it seems they are waiting to see how the next few weeks play out and we expect if they take any action it will be closer to the deadline if a chaotic trading situation looks increasingly likely.

“One event people are already planning for on 31 October is Halloween, spending a collective £1.5 million on pumpkins in the past 12 weeks. Those sales are 29% higher than at this point before Halloween last year and retailers should be taking note and aiming to capitalise on the celebration in the coming weeks.”

The proportion of sales on promotion increased for the first time in nearly four and a half years this period to 32.3%, driven by Tesco’s ‘100 years of value’ campaign and Sainsbury’s ‘Price Lockdown’. The performances of Tesco, Asda and Morrisons all improved compared with last month, but sales are still down year on year. Tesco sales declined by 0.2% as its market share was reduced to 27.0% and Fraser McKevitt comments: “The announcement that Dave Lewis will depart as Tesco chief executive next year has inspired inevitable reflection on his tenure and it’s worth noting that the retailer’s sales were in freefall when he joined in September 2014 – dropping 4.5% year on year. Since then Tesco’s absolute and relative performance has improved and profitability has returned, but its market share is down from 28.8% at the start of his time there.”

Sales at Asda fell by 0.9% during the past 12 weeks, dropping 0.3 percentage points of market share to 15.0%, while Morrisons remains behind the rest of the pack, declining by 1.8% with a market share of 9.9%.

Lidl and Aldi continue to gain share and Fraser McKevitt comments: “The discounters now account for a combined 14% of UK grocery sales which is 0.8% percentage points higher than last year, an increase that’s worth nearly one billion pounds annually. While traditionally known for its own label ranges, Lidl’s 8.2% growth was boosted by sales of branded goods which grew twice as quickly. 

“Meanwhile, Aldi grew by 7.3% during the past 12 weeks as it attracted more new customers than any other retailer with 689,000 additional shoppers. Its small but growing ‘Everyday Essentials’ also added an extra £18 million in sales.”

Co-op grew at its fastest rate since April at 3.9% as the convenience retailer’s £5 ‘Super saver deal’ drove up sales of fresh pizza by 20% and ice cream by 17%. 

Online specialist Ocado continued its run as Britain’s fastest-growing supermarket – a position it’s held since May 2019 – as its growth sped up slightly to 13.3%.

Iceland sales rose by 0.5%, supported by widely available coupons, while Waitrose declined by 1.1% and its market share slipped 0.1 percentage points to 5.1%.

*Kantar Brexit Barometer.  A total of 1,144 interviews were conducted online among adults living in Great Britain between 5 and 9 of September 2019. 

An update on inflation

Grocery inflation now stands at 0.8%† for the 12-week period ending 6 October 2019. Prices have been rising since the 12 weeks to 1 January 2017, following a period of grocery price deflation which ran for 30 consecutive periods from September 2014 to December 2016. Prices are rising fastest in markets such as canned fish, crisps and frozen fish, while falling in canned cola, instant coffee and chilled fruit juices.

Market shares and penetration levels in Spain in 2019 (January - September 2019) 

Eroski group (4.9% of market share) lost 0.5 points share during 2019. The Basque group’s core regions are those most affected by the increase in competition. In the Basque Country, Catalonia and Galicia, both the national and regional operators are increasing their presence, which is having repercussions on Eroski’s growth, despite maintaining a privileged position overall.

Meanwhile, Auchan (3.4%), remains in the top six and has a stable market share. They have reversed a previous downward trend while continuing the process of combining brands under the name Alcampo. They have also closed their least profitable stores and updated many own-brand products in an effort to recover the image and influence that the brand once had in Spain.

Regional supermarkets maintained their good historical record and achieved a market share of 12.2% (not including Eroski), collectively they are the second biggest national retailer. A growth of 0.4 points compared to 2018, demonstrates once more that Spanish consumers trust this type of supermarket, which maintain their growth and leadership position in various regions, despite the efforts of the big national retailers.

Growth of e-commerce

E-commerce continues its ascent, rising 0.3 points to reach 1.9% of the FMCG market. This channel has the challenge of generating new shopping habits, something that is linked to fresh products. It continues to be used mainly for one-off purchases despite the increasingly wider options available.

Florencio García concludes: “In 2019 the consumer has had more options of where to shop. When it comes to choosing a retailer it is the fresh product offer that matters. This restricts the growth of online shopping, validates the regional supermarkets and is the true battleground for FMCG retailers. This, along with environmental concerns and demand for organic products, will define the final stretch of the year and the start of 2020”.

* Regional supermarkets do not include Eroski or El Árbol supermarkets.
Period: January to September 2019. Data at 9 September 2019.
Source: Kantar (Worldpanel retail Spain)

Source: % Volume Growth | FMCG | MAT Q2 2019 vs. YA | Total Latam

What differentiates the region?

The dairy sector is the hardest-hit in Latin America, particularly across Ecuador (-5%), Brazil (-3%), Mexico (-2%) and CAM (-2%). Homecare meanwhile continues to grow in several markets, 8% in Ecuador alone.

Half of Argentineans’ spending is allotted to mainstream brands, and that has risen 8 percentage points (p.p.) over the three past years. In turn, premium brands have lost 3 p.p. in Brazil and gained 3 p.p. in Mexico. Private label is already successful in CAM (mostly in Panama and Costa Rica) and Colombia.

In a setting of shrinking consumption, there are markets that manage to expand consistently, such as beer, whose penetration has increased from 60.9% to 63.6% over the past few years. This means 12 million additional households are now consuming the category.

What is changing?

There are opportunities across niche segments (such as lactose- or gluten-free) where specialty products proliferate, and Latin consumers have already incorporated new shopping habits (such as e-commerce).

It is time to redefine the boundaries of markets in a context where biscuits compete with yogurt and soft drinks with beer. Consumers choose across a set of categories, not across a set of brands, depending on their needs for each consumption occasion.

Learn more about how Latin Americans seek value in the FMCG sector downloading the summary of our latest report through the button on the right of this page. Also, please get in touch with our expert if you would like to know how your category or your business is performing.

Download in Spanish

With the excitement surrounding tech launches we would be forgiven for thinking most people already own most tech hardware and that there is little room for growth. However, longitudinal tracking insight from Kantar shows that owning more than 3 devices in the US is still increasing year on year, whether this is smartphone, tablet, laptops or wearables, and ownership is just as high in UK. Kantar’s Global Client Director, Dominic Sunnebo comments "As the range of devices available increases we are seeing growth in multiple-device ownership with over a third of the US population (+4% yoy) and 42% of UK population owning 3+ devices. Almost 10% of the US/UK populations own all four types of device."

With so many different device categories with multi-functional purposes available, it is important to understand how customers are using each device differently, their device activity preferences and where the overlap lies. Potentially the most obvious duplication of usage is between laptop and tablet. There has been much debate over whether tablets will replace laptops and if this is what consumers want. It seems that approximately half of all owners only own one device and half own both. Understanding the usage of their devices helps to explain what purpose each device serves to consumers. For those who own both devices tablet usage is skewed heavily towards entertainment (playing games/video calling/streaming tv & music), whilst the laptop is primarily used for online shopping and document editing. That said, iPad Pro, compared to other main competitors, stretches consumer usage, with a higher proportion of owners using their tablet for content viewing from Music to TV/ Films, creating/editing documents and shopping. Sunnebo adds, "In a nutshell, laptops are used as a productivity tool and tablets for entertainment. As innovation moves tablets closer towards enabling productivity activities; with detachable keyboards, bigger screen sizes and stylus utilization etc., the balance in multiple-device ownership is likely to shift in future".

Coming back to brand ecosystems, the big question is, can they really help build brand loyalty?

Comparing Operating Systems in the US and UK, Apple has the highest level of owners with 3+ devices in their OS Ecosystem at 12% & 11% respectively vs. Android/Chrome OS at 2% & 1% respectively.

According to Sunnebo, "Kantar has identified that in order to achieve higher levels of 3+ device ownership within the same OS or Brand Ecosystem, the OS/brand must be one of the top brands owned in each category."

He continues, "Kantar also identified that the tablet brand owned can act as a trigger of conversion in brand switching. For example, if a consumer owned Brand A tablet and Brand B smartphone, when they change their smartphone they go for Brand A smartphone and enter a brand Ecosystem."

As length of ownership increases for the most highly penetrated tech devices (smartphones) manufacturers need to think of new ways to tap in to customer spending and maximise the opportunities a loyal base of consumers can bring. Innovation needs to be purposeful & continue to engage consumers further through building seamless integrated solutions aimed at providing convenience and simplifying consumers lives. Apple has launched Apple Pay, Apple credit card, Apple TV and Apple TV+, so it seems big tech believes that building ecosystems is the future.

Sun-Art Group maintained its leading position and grew by 2.8% in sales value compared with same period last year. Lower-tier cities drove its strong recovery and recorded both sales and penetration growth. RT-mart has strengthened its online business and improved the efficiency of physical stores due to its transformation empowered by Alibaba. This includes the digitalization of its stores and fulfilment systems as well as the Taoxianda O2O service. RT-Mart also restructured their offerings by strengthening their fresh food and imported products’ displays to meet the needs of middle-to upper-tier consumers. In addition, Sun-Art accelerated the convergence of its two banners at the end of 2018, where the Auchan brand is also able to leverage services and technology capabilities from the broader Sun-Art infrastructure.

The e-Commerce channel continued to deliver robust growth of 36%, with 58% of households in urban China purchasing FMCG online over the last 12 weeks. Alibaba made great progress and increased penetration by over 10 ppts, especially in lower-tier cities. This demonstrates the success of their initiatives to cater to a broader base of users, such as using simpler interfaces for first-time or infrequent user from less developed areas. In addition, Alibaba is dedicated to exploring different store formats to cover all the food consumption scenes, such as Hema Mini to target suburban citizens and Hema pick’n go to target office workers’ breakfast and snacking occasions. Kantar Worldpanel reported that young families contributed nearly 50% of Hema’s sales and they shopped in Hema at an average frequency of three times in the past 12 weeks.

The environment in France is contributing to this, on the one hand some people are concerned about their finances and making ends meet while others are concerned about the environment.

Corporate Social Responsibility (CSR) is a long-term challenge for the fashion industry and brands cannot ignore the importance that many people attach to ethical production and business behaviour. Price is still an issue, but consumers do expect brands to reflect their concerns. Developing a value proposition that reflects this is a good move for brands, but they need to be sure that what they offer is credible. The report reveals that 30% of French people have already purchased second-hand clothes and 36% want the number of imports from Asia to be limited.

Top Risers

This data is for the clothing/footwear/accessories sectors of each brand. Kantar’s panel in France is 12,500 individuals.

Of the brands that are performing well, affordable pricing is key but not the only issue. Brands such as Action, Lidl, Primark and Intersport have opened points of sale with a clear market position which has allowed them to attract more customers and grow share. Action, Lidl and Primark have focused on the consumer need for value, while Intersport benefits from the strong pull of lifestyle brands.

E-commerce is still growing well, gaining an additional one percentage point increase.  Amazon registered 2.5 million additional orders for clothing in France this year and has expanded their range to include the top 15 fashion brands. H&M is also reaping the benefits of its online investments which now accounts for 80% of their growth.

So in summary, fashion brands that are looking for growth need to be mindful of consumer needs, communicate a clear position and a competitive price point.

If you’d like to learn more about France’s Référenseigne annual report on the fashion industry, please send us a message through the button at the right of this page.

Charlotte Scott, consumer insight director at Kantar, comments: “When summer draws to a close people return to their normal routines and their shopping habits shift accordingly. Children are back at school and parents needing easy breakfast and packed-lunch options have boosted sales of cereals, yoghurts and bread by 14%, 10% and 6% respectively during the past four weeks, compared with the month before.

“If you’re one of the people that feels like Christmas starts earlier and earlier each year – you might be right. With less than 100 days to go until the big day, retailers have been ramping up their festive activity with deals on seasonal chocolates including advent calendars. Sales of chocolate boxes and gifts were 65% higher than the previous four weeks as people took the opportunity to get a head start on their shopping.”

Tesco and SuperValu are neck-and-neck with 21.4% market share this month. Charlotte Scott explains: “SuperValu has returned to growth following two periods of negative growth and these 12 weeks represent its slowest share decline since September 2018. Following a similar trend to the overall market, its shoppers have been making fewer, larger shops and taking home nearly one more item on average per trip.

“Meanwhile, Tesco’s sales decline softened to 0.5% as volume sales moved into growth, up 0.9% compared with last year. It might be too soon to call these improved performances from Tesco and SuperValu a fightback, but it will be welcome news given the recent success of Dunnes, Aldi and Lidl. Looking ahead to next month, it’s likely that this will contribute to all retailers being in growth for the first time since June.”

Aldi increased its market share this period while posting growth of 11.4%. As well as attracting new shoppers, Aldi is another retailer successfully encouraging bigger shops. With each customer now picking up 19.7 items each visit, Aldi is clipping at the heels of Dunnes where the average is 20 – the highest in the market.

Dunnes achieved the second fastest growth during the past 12 weeks at 5.8%. Charlotte Scott explains: “Dunnes attracted an additional 38,000 shoppers compared with this time last year. If there was one negative in Dunnes’ report card it would be that customers are visiting its stores less often – but that decline remains marginal at 0.3%.”

While Lidl’s growth slowed to 4.1% it remains ahead of the market and has increased its share from 11.8% to 11.9%. The retailer also performed well in some standout categories in the past 12 weeks – sales of frozen desserts were up 24%, despite declining by 4% in the wider market, and bread sales increased by 17%, compared with 2% across total grocers”. 

Brand loyalty

It has been another year of disruption for Scottish brands, which continue to grapple with the changing retail landscape and shifting shopper behaviour. 

Despite these challenges, brands are in rude health in Scotland. Over the course of the year, shoppers spent £164 more on brands per person than the average Briton. Brands also take a higher share of total spend in Scotland when compared to Britain overall, and are growing faster than supermarket own label ranges.

The five most chosen brands in Scotland remain; Warburtons in the top spot, followed by Heinz, McVities, Coca Cola and Hovis, with no change in the top five compared with last year. Snapping at the heels of the top 20 most chosen brands in Scotland are McLelland, Bells, AG Barr and Tunnock’s.

Hometown glory

When it comes to the most popular Scottish brands, the top two retain their places in the ranking. Irn Bru retains its number one position, with Grahams Family Dairy not far behind in second place. The brand’s NPD portfolio has helped it to gain ground and expand into health-focused categories such as high protein yoghurt and ice cream, and cottage cheese.

The Free From category continues its ascent and Nairns makes an appearance at position 20 on the ranking as its portfolio develops to address this market.

Healthy growth

Government intervention, whether in the form of Minimum Unit Pricing or the sugar tax is having a widespread impact on consumer choices. High sugar products set to remain in the spotlight as the government takes action to tackle obesity, and the non-alcoholic and low alcohol sector continues to grow as the population looks to moderate drinking habits. As a result, brands need to appeal to consumers who are actively trying to follow a healthier lifestyle.

Green dream

As consumers become ever more aware of the environmental impact of their choices, brands and retailers will need to demonstrate they are looking ways to address these concerns. Whether that's by taking action on packaging, or catering to the increasing number of flexitarians in the population, sustainability is set to exert a broad influence over the coming years.

Download the report today to read the full ranking of the most chosen brands in Scotland. Get in touch for more infomation on how we can help you to ensure your brand is the one shoppers choose when they're at the shelf.

While overall sales grew by 0.5%, volume sales remained flat and Fraser McKevitt, head of retail and consumer insight at Kantar, comments: “As we move closer to 31 October, it seems talk about stockpiling might be just that because we’re not seeing any evidence of it at the moment. In fact, households bought 0.9% fewer items during the past 12 weeks than they did last year.”

The August Bank Holiday brought some overdue sunshine and Fraser McKevitt comments: “All summer, retailers have faced tough comparisons with last year’s heatwave and disappointing weather has made it hard for them match the highs of 2018. The forecast for August Bank Holiday was more than welcome and shoppers made the most of it being the hottest one on record, spending £1.3 billion from Friday through to Sunday, which was marginally more than last year.” 

Tesco and Sainsbury’s became the latest retailers to make high-profile announcements about reducing plastic packaging. Fraser McKevitt explains: “The plastic issue isn’t going away and the public continues to put pressure on brands to make meaningful changes. It’s clear there is still work to be done because, despite the various pledges, only 16%* of people can name a retailer that is doing ‘a lot’ to reduce its plastic waste. Worse still, only 10% can name a grocery brand making significant strides.”  

Lidl reached a new record high market share and Fraser McKevitt comments: “Lidl has crossed the 6% market share line for the first time, and an additional 618,000 shoppers visited the retailer compared with last year, helped by store openings, refurbishments and its newspaper voucher deals. Having moved through the 5% barrier as recently as May 2017, the retailer has taken just over two years to add another percentage point to its market share – one that’s worth £1.2 billion annually.”

Meanwhile, Aldi increased sales by 6.3% and Fraser McKevitt says: “Aldi’s strongest growth came from the south of England where sales increased by nearly 9%. The discounter’s lowest market share continues to be in London, where it only accounts for 3.3% of grocery sales, so it’s unsurprising that this week it announced plans to more than double its number of stores within the M25.”

The other bricks-and-mortar retailer in growth this period was Co-op, increasing its sales by 1.8%. One third of British households made a trip to the convenience retailer during the past three months, visiting the store nearly twice a week on average.  

Ocado was again the fastest growing retailer. Fraser McKevitt comments: “With one year to go until Ocado starts selling M&S products alongside its own lines and national brands, sales at Ocado were up by 12.7%. Ice cream, cheese and sparkling wine all experienced growth in excess of 20%.”

This was Sainsbury’s strongest period since October 2018 and it was the best performing of the big four retailers for the second month in a row, despite marginal sales decline of 0.1%. Sainsbury’s increased its rate of sales on promotion faster than any other retailer with its Price Lockdown strategy lowering prices on meat and fresh produce in particular.  

Sales at Asda and Tesco fell by 1.0% and 1.4% respectively and Fraser McKevitt explains: “There were bright spots for Tesco including sales of free-from products, which were up 11%, and its own value lines like Redmere Farms and Creamfields as sales of these ranges totalled over a third of a billion pounds.”

Morrisons market share dipped below double digits at 9.9% as sales fell by 2.0%. Waitrose sales declined by 1.3% and Iceland by 2.0% taking market shares to 5.0% and 2.1% respectively.

*5,214 British consumers were interviewed in May 2019 as part of the global Kantar study Who cares, who does? Consumer response to plastic waste, published 10 September 2019.

An update on inflation

Grocery inflation now stands at 1.0%† for the 12-week period ending 8 September 2019. Prices have been rising since the 12 weeks to 1 January 2017, following a period of grocery price deflation which ran for 30 consecutive periods from September 2014 to December 2016. Prices are rising fastest in markets such as crisps, canned fish and frozen fish, while falling in canned cola, chilled fruit juices and instant coffee.

The fast-moving consumer goods (FMCG) industry is facing its own battle with plastic, and public outcry has led to a response from some of the most prominent brands around the world. Supermarket chains have done away with single-use plastic bags, while many manufacturers have taken steps to reduce or remove plastic packaging at point of sale or in their supply chain.

Our research found that nearly half (48%) of all consumers worldwide expect manufacturers to take the lead, saying they have the most responsibility to act on these issues. And making changes to account for this is clearly a matter of ‘when’, rather than ‘if’, for all businesses.

But, how much do shoppers really care? Are their criticisms and wishes reflected in their own purchase behaviour? Which regions, countries and demographics are most engaged with reducing their plastic consumption? Where does the opportunity lie for retailers and manufacturers?

Kantar, in collaboration with Europanel and GfK, has surveyed more than 65,000 people in 24 countries— exploring how they feel about the use of plastics by FMCG companies. What makes this study unique is our ability to compare their answers with our panellists’ real purchase behaviour, to truly understand how they change their shopping baskets and their relationship with the brands they are choosing.

That said, retailers and manufacturers can’t expect consumers to jump to their brand purely for their green credentials— and being ‘green’ or sustainable means different things in different markets. By understanding the ‘green gap’ between those who say they care, and those that actually do something about it, we can unlock the opportunities of environmental concern—and help brands play an important role in shaping our future planet.

Through the links on the right of this page you can download the report, watch the webinar, or get in touch with our experts to discover how this data can be linked to your normal databases and see how your brand buyers responded.

However, the story is not that simple. Further analysis of Worldpanel ComTech longitudinal tracking data shows that it is amongst new owners that engagement is much lower, whereas amongst existing owners of smart speakers (those who have had their device since wave 1), the engagement remains on a par with their previous score. The NPS score amongst existing owners is 25 whereas the NPS amongst new owners drops substantially to -1. So why the difference amongst newer owners?

Dominic Sunnebo, Global Director for Kantar, comments: “In the first wave of fieldwork we picked up earlier adopters who generally have an interest in new technology and are keen to get their hands on the latest technology, so engagement will naturally be high. Also, we know that amongst existing owners 57% bought the speaker themselves with just 35% receiving it as a gift. However, amongst new owners the % buying themselves has dropped to 47% with 43% receiving it as a gift.”

The level of engagement is therefore drastically impacted depending on whether the item was a deliberate personal choice vs being received as a gift. Those who buy themselves have an NPS score of 36 whereas those who received their speaker as a gift have an NPS score of just 4. Promoters of smart speakers are much more likely to have bought the speaker themselves, whereas those who are passive, or detractors of the speaker are much more likely to have received it as a gift.

Increasing the adoption of speakers to win the share of voice in the home is a key strategy for the two big players in the market, Amazon and Google. Pricing and promotion over the Christmas festive period was fiercely competitive. Consequently, many people will have been the recipient of a smart speaker without necessarily having put it as top of their Christmas list.

Dominic Sunnebo adds: “Whilst not being as unwanted as another pair of socks or indeed a festive jumper, receiving a smart speaker as a gift rather than being a proactive purchase by themselves has a significant impact on consumer engagement with their device. Whilst Google and Amazon are successfully getting more devices into homes, those who are not actively choosing to purchase a speaker themselves are more disengaged. The big players must move fast if they are going to win over these reluctant owners”.

Amazon remains the dominant player with 76% share of the US market with Google having 16%. Interestingly this seems to have impacted Google NPS score in the US more than Amazon, possibly due to its smaller market size. Amazon existing owners have an NPS of 25 which has dropped to 1 amongst new Amazon owners, however the Google NPS is significantly lower at -11 amongst new owners compared to 25% amongst existing owners. This suggests that Google, whilst successfully pushing their home mini over Christmas, have more work to do to win the hearts and minds of the end recipients.

So why are gift recipients so disgruntled with their smart speaker? Primary dissatisfaction reasons for detractors in the latest data were with the speaker’s ability to answer questions correctly, followed by responsiveness to voice and ease of set-up.

Dominic Sunnebo continues: “While early adopters and purchasers might be prepared to understand that the technology will have limits as it is relatively new and be prepared to invest time to set up, those who receive as a gift are less tolerant, less patient and generally have higher expectations”.

So, we haven’t fallen out of love yet, however through gift-giving we are seeing more people adopt a technology before they are ready to engage. Understanding this group of people and tracking their usage is important to ensure this category continues to grow.

* Net Promoter Score (NPS) is determined by calculating the difference in % of Promoters (those who score likelihood of recommending: 9-10) vs Detractors (those who score likelihood of recommending: 0-6).

Our upcoming publication Who Cares, Who Does? is based on the results of our global survey covering 24 countries across Europe, Latam and Asia. Not only did we look at what people cared about, but we went further and investigated what actions consumers are claiming to take and whether this is also true in their purchasing, through our direct link to their real shopping behaviour. 

Our expert Natalie Babbage, Global LinkQ Director, will share the main findings that will help you understand what your consumers expect from you around sustainability. 

Join the webinar to learn more.

SIGN UP FOR THE WEBINAR:

• Tuesday 10th September 10 am (UK time)
• Tuesday 10th September 4 pm (UK time)

Among the top retailers in modern trade, Yonghui kept up their strong performance by reporting double-digit growth and improved penetration in the last 12 weeks. Instore activations featuring summer refreshment occasions and Father’s Day celebrations in Yonghui’s Super Species stores helped drive footfall and spending. A strong alliance with JD O2O services, along with various promotion offers, stimulated sales during the mid-year 618 shopping festival. Despite losing shoppers, Walmart did see a slowdown in the decline of frequency and basket value. Its newly built regional distribution centre in the south region started to pay off and helped to better meet demand from Chinese consumers for fresh goods and convenience services.

In urban China, 57.4% of households purchased FMCG online over the last 12 weeks. Alibaba and JD remained on the front foot, taking 45.5% and 15.4% online market share respectively. It is noteworthy that Alibaba made improvements in penetration amongst older single and couple households, reaching 25.8% in the last 12 weeks. This was thanks to the “Love Your Age” campaign during the mid-year 618 festival and increased investment in livestream videos for healthcare and farm products targeted at the older age groups. JD also increased their penetration, but not as fast as Alibaba. 

It is the traditional and specialist channel that continue to suffer. Although representing nearly 25% of spend on FMCG products, sales dropped by 4% in Q2. Such spend is transferring to the modern trade, which notched a sales increase of 1.9% in the quarter, even though they only consumed an additional 0.2% of products in this channel.

According to Florencio García, Retail & Catman Sector Director at Worldpanel Division, Kantar: “This shows that the consumer continues to look for higher-quality products and is willing to pay more for them.”

Fresh produce continues to be the market driver, responsible for the vast majority of trends. Spaniards spent 1.1% more on these products in the second quarter of the year and continue the trend of making this type of purchase more often in modern trade. “This might explain the reduction in spending in the specialist channel which has allowed more modern traders to close the first half of the year on a positive note in terms of sales,” adds Florencio García.

Mercadona and Lidl lead the growth among the big retailers

As for the large retailers, Mercadona strengthened its leadership position in the second quarter of the year, now capturing 26.1% of FMCG spend in Spain, with a growth of 1.2 points compared to 2018. Mercadona started the year with more moderate growth, struggling to gain market share in some food and household goods categories where it is already strong. However, with the passing months, and especially with the contribution to growth from its fresh foods section, Mercadona has bounced back to the growth rates of previous years.

Carrefour, which ended 2018 down 0.2 share points, has rebounded in 2019, and after a good start to the year, managed to maintain its position in recent months, standing at 8.7% market share, which is 0.3 points higher than a year ago. Carrefour's growth is marked by key sections in its “Act for Food” plan, such as fresh produce and organic products, as well as its good online development during 2019.

For its part, Grupo DIA remains the third most popular Spanish retailer, with a 6.6% market share, representing a loss of one point compared to its position a year ago. By comparison to its peak in 2016, it captured 8.9% of the Spanish market in the same quarter.

“Grupo DIA and Carrefour have had several management changes in recent months, and the entire industry is waiting to see what these changes translate into. Carrefour has already made good progress in certain sections, although it still has challenges, especially when it comes to making hypermarkets attractive to Spanish consumers who have ever more options. In the case of DIA, in spite of all its troubles, it remains a key retailer for Spanish households, and it faces the great challenge of capitalising on its square-metre area and improving its image. In this sense, it seems that price will be once again be a key factor in gaining consumer confidence, and the sector expects adjustments in the second half of the year,” says Florencio García.

Lidl has continued its rate of growth in recent years and in 2019 it was the second biggest retailer in terms of number of customers, which has served to boost its share of the Spanish market and gain 0.7 points, reaching 5.6% in Q2, ranking as the fourth national retailer.

Grupo Eroski maintains its relevant position in the Basque, Galician and Balearic markets, with its biggest declines still concentrated in Caprabo, although its numbers have improved compared to 2018. Increased competition in its core territories, coupled with the sale of some of its square-metre area, have placed the Basque cooperative with a 4.9% share in the country, compared to 5.5% of the market it had a year ago.

Grupo Auchan, for its part, has taken a 3.5% share of the Spanish market in the second quarter, which represents a gain of 0.1 points, but above all a change in trend with respect to the 2018 and 2017 declines, which will have to be confirmed in the second half of the year, validating if their change of “Simply” stores to “Mi Alcampo” upholds this trend.

In conclusion, in the second quarter of 2019, the top six retail groups have represented 55.2% of the Spanish market, increasing their weight overall, although other market players continue to gain ground, “as is the case with Aldi which, without yet being established in all regions, continue to stand out by attracting new buyers; or regional supermarkets, where we can still find success stories in almost all regions: supermarkets such as Bon Preu, Consum, Ahorramas or Gadisa, among many others, which have attained very positive numbers so far this year, supported above all by their fresh produce sections,” concludes Florencio García.

Charlotte James, consumer insight director at Kantar, comments: “While certain typical summer categories felt the impact of the mild weather this period, it wasn’t all bad news. Ice cream and sun care sales were down 17.0% and 41.5% respectively however wine, which is usually more popular in colder months, grew by 13.7%. All the major retailers took advantage of this, with Tesco particularly benefiting by ramping up promotions in the sector. The proportion of wine bought on deal at Tesco increased from 29.6% to 43.8% resulting in category growth of 14.9% for the retailer.”  

Aldi and Lidl continued their march on the Irish grocery sector again this month. Aldi’s particularly impressive growth of 12.7% helped it achieve a record market share of 12.6%. While Dublin remains a key area for the retailer, Munster and the rest of Leinster are still its heartland and contributed two-thirds of its overall sales increase. Lidl now accounts for 12.0% of Irish grocery sales and is also particularly popular in Munster, where it increased sales by 12.1%.

Scrutiny over single-use plastic was a major trend this period, with retailers seeking to adapt to changing consumer preferences. Charlotte James explains: “Aldi’s ban on black plastic trays for fruit and veg packaging and SuperValu’s move to 100% compositable shopping bags are direct responses to a change in shopper habits. Many consumers are already making the shift towards more sustainable choices. For example, loose fruit sales grew by 6.4% in the latest 12 weeks as pre-packed alternatives declined by 2.3%. Lidl has made the most headway in this respect and sold 23% of its fruit loose, the highest proportion of all the retailers.”

Fresh produce as a whole was a clear focus for all the grocers this period. Dunnes, Tesco and Lidl attempted to demonstrate value through a mix of 49 cent price points while SuperValu and Aldi continued to offer discounts on different product ranges. Dunnes, Ireland’s largest grocer again this month, enjoyed success with sales of fruit, veg and salads growing by 2.9% – ahead of the market rate. Charlotte James elaborates: “Dunnes has had a strong 12 weeks across the board, growing at 6.4% and claiming 21.6% market share. The retailer is focusing on differentiating itself from competitors through a range of in-store experiences and this month opened a new premium food hall in Dublin’s Ilac Centre as well as a new site in Naas which focuses on its fresh counters”.

SuperValu improved its performance this period with sales decline softening to 0.3%. As the market moved towards less frequent but bigger shopping trips, SuperValu capitalised with a 10.3% increase in the average spend per shop.     

Overall, average price growth of 1.1% was a welcome boost for the retailers while the strong euro also contributed to an increase in cross-border shopping in the latest 12 weeks. Charlotte James explains: “Brexit uncertainties and sterling’s struggles saw cross-border spend increase by 14% compared with this time last year, with much of that on fresh and chilled products. However, this still only makes up 0.6% of all sales and remains a small part of the market.”  

James Foti, consumer insight director at Kantar, said: “We hear time and time again that this is the year of the podcast, with established players looking to get their slice of the action.  Podcasts are really becoming an established channel and marketers need to understand the role they play in the marketing mix.  Our new service will for the first time give a clear picture of who podcast listeners are, what other media they engage with and even where they last shopped.”

Insight available on a four-weekly basis from September 2019 will cover demographics, what platform podcast listeners are using, the genres they are listening to and for how long.  Alongside a historical dataset tracking panellist’s usage of music streaming and other media, this will give media buyers and brands unprecedented understanding of podcast listeners and how to target them effectively.

The new service is an addition to Kantar’s 15,000-strong lifestyle panel in the UK, making it a robust and continuous read which can be flexible to subscribers’ needs, and gives a rounded picture of podcast listeners’ behaviour, whether that’s the last film they saw in the cinema, their favourite websites and TV channels or their favourite fashion brand.

As part of the service, Kantar also plans to run a twice-annual deep dive into podcasts, with the aim of understanding the triggers and barriers to when it comes to listening to them.

In total, more than 8 million shoppers purchased a luxury brand in the 12 months to April 2019. Despite this, luxury products have a long-term downward trend: just three years ago they represented 41.3% of the market, the latest figures show a drop to 34%. This decline is not the result of fewer buyers, but rather a change in purchasing behaviour: the luxury brand consumer is purchasing fewer units and spending less (€96 vs €118.70 three years ago).

According to Rosa Pilar López, Individuals panel director at Kantar: “The evolution of the cosmetics/beauty segment is highly influenced by tourism, which contributes a significant share of business to these types of brands, but for which consumer behaviour can’t always be predicted”.

By category, fragrances make up the core of the luxury segment, representing three-quarters of spend, with more than 7.4 million buyers. One in every four consumers of luxury fragrance brands only purchase these types of brands, whereas in the other categories, consumers alternate with others (FMCG, pharma, etc.).

In recent years, the profile of Spaniards who purchase luxury beauty products has changed. According to Kantar’s data, luxury is becoming more popular among younger males, although the majority of spend comes from female and adult targets. The best opportunity for growth is targeting women. Despite having a much lower loyalty level than their male counterparts when it comes to purchasing these products, women from 35 onwards spend 27% more on high-end products with facial cosmetics and make up the key categories.

When it comes to purchasing these products, the luxury consumer focuses on price. They prefer to shop at perfume chains, which account for almost half the distribution value (49.9%). Primor, Druni and Arenal are among the most dynamic retailers, gaining market share thanks to the addition of new customers and aggressive discount policies.

Rosa Pilar López concluded: “Despite the changes this segment is experiencing, there are loyal “luxury” shoppers who are characterised by their brand fidelity, sophistication and being up-to-date on the latest trends. They look after themselves and are concerned about their image. The toiletry bag of the luxury brand consumer does of course also have room for distributor and low-cost brands.”

Notes from the editor

Luxury: facial cosmetics, colour cosmetics, cologne, perfume and suncare. 
Study sample: 20,000 individuals representative of the Spanish population. 
Data period: luxury product buyers: year ending April 2016 vs. the same period in 2019.

Fraser McKevitt, head of retail and consumer insight at Kantar, comments: “The memory of last year still looms large for retailers and this summer’s comparatively poor weather, combined with low levels of like-for-like price rises, have made growth hard to find for retailers.

“July’s hottest day on record wasn’t enough to shift the market into growth, but the grocers will have been encouraged by glimpses of better weather during the past four weeks which helped boost sales of summer staples like hayfever remedies, suncare and burgers by 17%, 8% and 5% respectively.”

Lidl’s sales increased by 7.7% and the discounter reached a record market share of 5.9% during the past 12 weeks. Fraser McKevitt explains: “Lidl’s raft of new store openings has helped it attract 489,000 additional shoppers this period. Its campaign to encourage people to do their main weekly shop at Lidl is making an impact and the average basket spend is now nearly £19, 3% higher than last year, though still significantly lower than the £22.65 average spend at the big four. While best known for its own-label products, branded lines at Lidl grew by 19% this period and now account for 13% of the discounter’s sales with a strong presence for alcohol, toiletries, household products and soft drinks."

Meanwhile, sales at rival Aldi increased by 6.2%, supported by sales of bakery products, up 11%, and biscuits, up 13%. Fraser McKevitt comments: “Nearly half of all households shopped in an Aldi during the past 12 weeks, showing the extent to which the discounter has established itself in our retail landscape – this figure increases even further to 58.4% in the north of England where the retailer is most popular.” 

Once again Ocado claimed the top spot as the UK’s fastest growing grocer, increasing sales by 12.6% this period. The online retailer increased its shopper base by 7% and encouraged its customers to spend £1.93 more each delivery. Ocado’s share of the total grocery market now stands at 1.4%, while it commands 18% of all online supermarket sales.

In a tough market, Co-op also found growth: sales are 0.2% higher compared with a year ago.  Its new high-profile £3.50 burger and beer deal, which encourages shoppers to opt for barbecue favourites despite the weather, has helped bring customers into its stores more often. At the other end of price spectrum, sales of the convenience retailer’s premium Irresistible range grew by 11% driven by strong performances for crisps and snacks, cheese and fruit.

Sainsbury’s accounted for 15.4% of supermarket sales this period. Fraser McKevitt continues: “While each of the big four lost share, Sainsbury’s will be cheered to be the strongest performer among this cohort for the first time since November 2017. Bucking the market-wide own-label trend, sales of branded goods at Sainsbury’s rose by 1.5%, driven by higher levels of promotion and its price lockdown strategy.”

Asda and Tesco’s sales shrunk by 1.5% and 1.6% respectively. Fraser McKevitt explains: “It wasn’t all bad news for Asda and Tesco this period. Asda’s online growth of 11% was notably strong while Tesco continues to find success with its cheapest own-label lines. In fact, total sales of Tesco’s value tier were £29 million higher than this time last year.”

Already selling more items through deals than any other retailer, Morrisons increased its level of promotion this period as its overall sales fell by 2.7%. A reduction in number of items bought per trip also contributed to this decline and its market share fell to 10.1% during the past 12 weeks.

Waitrose’s market share decreased by 0.1 percentage points to 4.9%. Fraser McKevitt says: “Free-from products were a bright spot for Waitrose, and it sold 8% more items from these aisles than this time last year.  As diets change and public awareness of food intolerances continue to grow, free from products account for a greater proportion of sales at Waitrose than at any other retailer.” 

Iceland’s market share held steady at 2.1%, with sales down by 0.4% during the past 12 weeks.

An update on inflation

Grocery inflation now stands at 0.9%† for the 12-week period ending 11 August 2019. Prices have been rising since the 12 weeks to 1 January 2017, following a period of grocery price deflation which ran for 30 consecutive periods from September 2014 to December 2016. Prices are rising fastest in markets such as crisps, canned fish and frozen fish, while falling in canned cola, instant coffee and chilled fruit juices.

Claire McClelland, consumer specialist at Kantar, said: “A new DVD, CD or game remains a fail-safe present for those dads who have everything. Physical video did particularly well from the Father’s Day this year – children picking up a favourite boxset or film for their fathers totalled £8.5 million worth of sales.”

Online retailers performed well again this quarter, with Amazon accounting for 25% of all spend and growing share in each category. Claire McClelland said: “Amazon and eBay are increasingly popular with shoppers wanting to get the latest releases without leaving their homes – particularly if a traditional retailer has disappeared from their local high street. Amazon will be expecting this trend to continue as a third of shoppers planning to shop during its Amazon Prime Day were intending to buy physical entertainment, compared with 42% who had their eye on electronics. 

“However, if last year is anything to go by, success for Amazon doesn’t inevitably mean bad news for the high street. People that bought something from the online giant during the week of Amazon Prime Day in 2018 spent 40% more on the high street than the average shopper during those days – demonstrating the value of those shoppers to bricks-and-mortar retailers as well.”

Argos outplays rivals online

The mint game market was impacted fewer big-name releases this quarter and sales declined by 14% compared with this time last year. Claire McClelland explained: “Shiny, new releases can command higher prices and, with fewer new names entering the chart, a fall in average prices from £27.90 to £25.77 has been the key contributor to slowing sales.”

Online, Argos attracted more first-hand game shoppers this period while Amazon and specialist mint game stores have seen numbers fall. Claire McClelland said: “Argos’ online business was a bright spot in the mint game market and uniquely manged to increase its shopper base while other online and bricks-and-mortar retailers lost ground. Though not enough to offset overall losses year on year, Argos has stolen £300,000 of mint game spend from Amazon this quarter, £132,000 from GAME and £200,000 from Tesco.”

The Nintendo Switch continues to outperform its rivals and sales of its games increased by 6% this period, including 40,000 buyers of the most popular title, Super Smash Bro Ultimate. Claire McClelland said: “Sales of consoles continue to suffer with 350,000 people buying a console of any kind this period compared with 407,000 last year. While tightening budgets could account for some shopper losses, it’s likely many are holding out and delaying their purchases until the autumn when the new Switch model and next generation consoles from Sony and Microsoft are expected to land.”

Independents fight back

While Amazon continues to dominate the physical music market, accounting for 24% of sales, there are signs of a resurgence among independent stores which have increased sales by 14% this period. In a continuing trend, vinyl is increasingly popular with nostalgic shoppers and performed particularly well within these independent outlets with sales rising 9% compared with 5% across the category. 

Claire McClelland said: “It’s been another tough quarter for the physical music market, with HMV store closures contributing to a 11% fall in sales. However, the summer festival season is now in full swing and retailers will be hoping the music events translate into spend at the tills in the coming weeks.  In the past year, half of all festival or concert goers reported an instant impact on their listening habits while a third said the occasion re-ignited their love for an album or artist.  Crucially, 13% went out to pick up a physical CD of the artist.”

Showman shadow hangs over video market

Going up against the hugely successful release of the Greatest Showman this time last year, fewer new titles this period accounted for £22 million of the physical video market’s losses. The most popular release this period, Aquaman, attracted 360,000 buyers– compared to the Greatest Showman’s 800,000 buyers.

Overall sales fell 28% as the market also felt the effects of HMV store closures, but 4k DVDs showed resilience and achieved 1% growth . Clare McClelland said: “There’s a lot of competition out there for DVD retailers, particularly in the form of online streaming services.  No longer just for young people, older generations are becoming increasingly tech-savvy and more confident at using these platforms and they are buying DVDs less often as a result.”

The data also reveals other growth opportunities for brands, retailers and businesses. Restaurant chains are currently undergoing a transformation, with a massive reach of 99% penetration and an average of 9.4 visits per month in 2018.

Edurne Uranga concluded: “There are 16 consumption occasions in the restaurant industry where chains and brands have huge potential to attract new customers. To capitalise on these, they need to fully understand the different needs in the stages of a consumer’s routine, and how the competition operates. It means a wide range of opportunities to grow in terms of both channel and category”. 

About the Out-of-Home consumption panel 

Since 2018, Kantar’s Out-of-Home consumption panel has analysed all the food and drink purchased and consumed by the Spanish population outside the home. With a sample of 8,500 individuals between 15-75 years old, representative of the population, and a 100% smartphone-based methodology, the panel collects and studies more than 1.8 million consumer statements per year.

Modern trade (including hypermarkets, supermarkets, and convenience stores) showed a slight recovery and reported growth rate of 2.3%; supermarkets recovered the most. Hypermarkets struggled during Q2 experiencing a decrease in penetration of 2.3ppts versus the same period last year as shoppers switched their spend to e-commerce to take advantage of the 618 festival. E-commerce growth far outstripped that of any other channel, a staggering 40.3% in Q2.

 Leading Grocery Share of Modern Trade - National Urban China 

© 2019 CTR Market Research                           Source: Kantar Worldpanel China

Mixed performance among the top players

Sun Art and Vanguard Group maintained their leading positions, and Yonghui continued to advance their share in the latest quarter. After a series of transformational activities to divest poor performing stores in some regions, Vanguard improved its market share in the latest 12 weeks and posted a small share improvement. Vanguard actively pushed its O2O service through collaboration with Ele.com, Meituan and JD.com and recently announced a strategic collaboration with Dmall to further digitalise its stores. 

Walmart and Carrefour continued to experience share losses in front of fierce competition from their local rivals. Despite the closure of stores, Walmart pledged to add investment in the supply chain to boost its online-and-offline businesses by building regional distribution centres to better meet demand from Chinese consumers on fresh goods and convenience services.

Increased M&A to build scale

Local retail giants have intensified their M&A activities to expand presence across different retail formats and areas. At the end of June, Suning announced the acquisition of a 80% share in Carrefour’s Chinese operations. This helped it to become one of the leading players in the grocery sector by leveraging Carrefour’s strength in supply chain and offline operation experiences. Suning has been aggressive in opening small-format stores over the past few years alongside its recent acquisition of the Wanda department store to expand its regional footprint. Wu-mart also made active acquisitions over the past two years, with recent moves to take a controlling stake of 55% in the Chongqing department store, together with Bugugao. The joint activity helped to expand their presence to the west region.

With higher level of M&A activities, China’s retail landscape is expected to be further consolidated and dominated by local players.

Three-cornered battle for 618

Chinese consumers snapped up more bargains in this year's June 18 retail festival, as all the e-commerce giants announced record sales. While urban consumers’ appetite for premium brands and imported goods continued, the consumption potential of lower-tier cities remains the growth engine for e-commerce players. In 2019, livestream video with aggressive social media activation became the new way to attract shoppers. While Pingduoduo and Tmall are catching up with JD.com in this critical sales season, all of them had an extended pre-sales period with promotions starting from the beginning of June.

In the latest 12 weeks ending 14th June 2019, 55% of Chinese urban households bought FMCG online. Alibaba led the growth, with a significant uplift on new buyers in the latest 12 weeks. Its penetration reached 31.4% in the past 12 weeks, up by 1.1 points versus the previous 12 week period to May 2019. Pingduoduo’s penetration also developed fast and reached 5.4% in Q2, 1.7% higher than Q1. JD saw slower year on year penetration growth compared to Alibaba.

For the first time since March 2017, two Irish retailers experienced a year-on-year decline. Tesco sales dropped 0.8% in the most recent period and SuperValu was down 0.5%. Douglas Faughnan, consumer insight director at Kantar, comments: “Shoppers swayed towards shorter and more frequent grocery trips during last year’s good weather to the benefit of Tesco and SuperValu, which typically boast higher levels of shopper frequency.  But every silver lining has a cloud, and both grocers were always going to face an uphill battle to replicate that performance this year.  

“The retailers have come out fighting in response. Tesco recently reintroduced its voucher campaign offering €10 off every €50 spent, and will be hoping a renewed focus on this type of promotion will help it capture a greater share of high value trips and move back into growth. The average value of a shop at Tesco is currently €24, behind Aldi on €27 and some way off Dunnes, which offers a similar voucher deal, on €42. 

Meanwhile, Dunnes is the only one of the three traditional retailers to record year-on-year growth this period, with sales up 6.3%. Douglas Faughnan continues: “Twelve months ago Dunnes was the third largest supermarket in Ireland. Thanks to an additional 65,000 customers in the latest 12 weeks the retailer has retained top spot for the eleventh consecutive period. The retailer typically performs strongest in the second half of the year and the run up to Christmas so has a solid base as we move towards its core trading season.”

While the average price consumers are paying has risen across the board, Lidl has seen the greatest increase as shoppers have bought more of its premium products Douglas Faughnan explains: “While Lidl has witnessed a slight rise in overall shopper numbers, its success encouraging people to trade up to its premium own label and branded lines is a key reason behind its growth. Nearly 100,000 more shoppers bought Lidl’s top tier own label products this period compared to last, with an additional 13,000 shoppers buying branded goods as well.” 

Both Dunnes and Lidl have capitalised on a growing trend among shoppers who prefer to prepare meals from scratch. Inspired by the success of meal kit brands and convenience cookbooks, recent package deals on the constituent ingredients for home-cooked classics like spaghetti carbonara and bolognese have been popular at both retailers. Sales of those key meal ingredients recorded strong growth across all the retailers, with herbs up by 26%, spaghetti by 10%, passata by 15% and mince by 11% – all comfortably ahead of the overall market.

Aldi announced another two fresh produce-focused concept store openings in Ireland this month – known as Project Fresh – underlining its commitment to the category. Sales at the retailer are up 12.8% on last year, with spend on fresh products typically outperforming overall growth. For example, dairy products are up by more than a third, while vegetable sales have grown by 15% as Aldi continues to capture share in the sector.

This smart speaker consumer panel helps hardware manufacturers and service providers to better understand consumers’ purchase drivers and to improve users’ experiences. The survey provides them with a complete understanding on reason to buy, usage, brand loyalty, satisfaction levels, purchase influencers, barriers, etc.

Using the same sample of 10,000 panellists in Australia, the panel allows monitoring purchase trends, loyalty and switching and the impact of purchase on behaviour change such as music listening and smartphone usage. It provides a comprehensive understanding of smart speakers in the context of the smart ecosystem, since respondents also supply information about other smart devices.

Paul Moore, ComTech Global Director at Worldpanel Division, Kantar, comments: “Our smart speaker continuous consumer survey helps our clients to precisely target new buyers as well as to evolve their offer to create a memorable consumer experience. We provide deep insights that make it possible for us to advise brands on what actions can be taken to grow both the category and share.”  

Nic Lewisohn, Global Managing Director at Worldpanel Division, Kantar, adds: “The expansion of the Australian panel is part of our goal to provide brands with a global 360º view of how consumers use technology to interact with content, services and brands. We are committed to innovation to help our clients anticipate opportunities to grow in the future.”

Besides smart speakers, Worldpanel ComTech also provides insights and analysis for smartphones, laptops, tablets, wearables, TVs and home appliances through panels that span across US, Europe, Asia and Latin America. Worldpanel ComTech is the reference guide for manufacturers, carriers and industry experts.

FMCG performance in Asia during the first quarter of 2019 had an overall positive growth of 4.1%, slightly slower compared to Q1 2018. China Mainland continued to lead the growth for Northeast Asia at 5% while the Philippines lead the growth for Southeast Asia at a stellar 12%.

Jason Yu, Managing Director of Kantar Worldpanel Greater China, commented: “Lunar New Year remains critical despite its lower contribution in the past years. The holiday is still a key barometer for Chinese private consumption as it is the time for family reunions as well as gift-giving. Brands will have to uncover opportunities in new categories, new channels and new ways of consumer engagement at Lunar New Year to win consumers’ wallet as their consumption patterns continue to evolve.”

In 2019, a significant proportion of Lunar New Year spend was from gifting. In China Mainland the top gifting categories include yogurt, UHT milk, frozen food and biscuits whilst in Vietnam it included cooking aids, beer, carbonated soft drinks, biscuits and cakes.

With more disposable income, this year consumers were putting less importance on preparing food and instead pampering themselves and their family members during the festive time.

Modern trade and hypermarkets were the most preferred channels for both countries with e-commerce the fastest growing, particularly increasing its importance for China Mainland. The hottest categories differ between the two countries. For China Mainland they included frozen food, oyster sauce, juice and carbonated soft drinks. Urban Vietnams’ hottest categories included tea, confectionary, canned food, soft drinks, snacks and nuts.

The report identifies that there are four key areas which brands and retailers should focus on to better capture the Lunar New Year’s spending spree in the future. They include:

• Engagement
• Availability
• Gifting as sales promotion
• More focus on lower tier areas

Kantar’s Consumer Insights Asia is a quarterly report conducted by the Worldpanel Division that provides at-a-glance key FMCG performance indicators across the region and the spotlight of the quarter. Through this spotlight we reveal consumer insights, trends, and also opportunities that arise within the region.

Download the report through the link in the right side of this page.

Fraser McKevitt, head of retail and consumer insight at Kantar, comments: “It was a challenging 12 weeks for all the major grocers, with growth slowing at every supermarket except Ocado. The main factor behind the sales drop-off is shoppers heading out to stores less often. Last year people shopped more frequently and closer to home as they topped up the cupboards while enjoying the sunshine and the men’s football World Cup. This year households are making one fewer trip, which may not sound like much but is enough to tip the market into decline.  In addition, like-for-like grocery inflation fell marginally to 0.9%, which is good news for consumers but has made it harder for retailers to achieve value growth.”

The difficulties in emulating last year’s performance are evident when looking at traditional summer categories. Most notably, consumers spent £75 million less on alcohol this year compared to last, with beer down 11% and cider down 13%. Soft drinks sales fell by £56 million and ice cream by £55 million. However, the cooler weather gave confectionery a chance to shine as it racked up an extra £68 million of customer spend. Chocolate in particular grew by 15% as shoppers enjoyed a treat without having to worry about whether or not it would melt. Despite the tough climate, branded goods also fared slightly better than the overall market, increasing sales by 0.2%. 

Lidl was the fastest growing bricks and mortar retailer this period, with sales up 7.0%. Fraser McKevitt explains: “Lidl increased alcohol sales by 19%, bucking the market trend partially thanks to its deal offering 25% off when buying six bottles of wine, reflecting efforts the retailer is making to encourage shoppers to purchase by the trolley not the basket. This focus is also evident through its newspaper vouchering deals, which offer a discount when people spend £20 or more.”

Aldi reached a new record share of the market, accounting for 8.1% of sales with spend up by 6.7% on last year. Its branded lines grew particularly quickly, up 17%, although they still account for less than a tenth of Aldi’s overall sales.

Amid the market slowdown Co-op kept its run of growth going. The retailer has now seen sales increase consistently since May last year. Fraser McKevitt continues: “Growth of 0.2% may sound modest, but it is particularly impressive considering it comes on top of a record increase of 6.4% last year. Co-op’s popular beer and pizza deal, which offered a full night in for only £5, sold well in 2018 and has now returned to the shelves – the retailer will be hoping this eventually translates to additional market share, which remained flat this period at 6.4%.”

Online specialist Ocado was the standout retailer this period in terms of growth, increasing sales by 11.9% and growing its shopper base by 6% over the past year. Ocado’s business model shielded it from the effects of shoppers cutting back on unplanned and smaller trips, which has impacted the bricks and mortar retailers, and in fact Ocado’s customers are buying online more frequently than last year.

Fraser McKevitt continues: “Although sales at the big four grocers fell collectively by 2.1%, they continue to account for two-thirds of all supermarket sales and there are bright spots for all the retailers.  

“Asda’s performance faced a particularly hard comparison against last summer, when sales were growing at their fastest rate in more than six years. However, the retailer has increased spend among more affluent ‘AB’ shoppers and achieved double-digit online sales growth, two significant boosts. Meanwhile, Tesco now holds a 27.2% share of the market, down 0.4 percentage points on last year. Despite this, it did find success through its value own-label ranges, including both its ‘Farm Brands’ and ‘Exclusively at Tesco’ lines, which increased by 11%.”

Sainsbury’s sales dropped by 2.3% this period, corresponding to a dip in its market share of 0.3 percentage points to 15.3%. While frequency of customer visits did fall, Britain’s second largest retailer also attracted 254,000 additional shoppers through its doors.

At the same time, sales at Morrisons fell by 2.6% taking its market share down to 10.3%, a loss of 0.2 percentage points. Fraser McKevitt points out: “Morrisons continues to sell more on promotion than any other retailer. Currently 47% of spend through the tills is linked to a deal, and this proportion is still increasing in contrast to many of its rivals. In addition, confectionery sales at Morrisons outperformed the already buoyant market.”

Iceland sales fell by 1.5%, with its market share staying flat at 2.1%. Meanwhile, sales at Waitrose declined by 1.9% and the retailer’s market share did not move from 5.0%.

An update on inflation

Grocery inflation now stands at 0.9%† for the 12-week period ending 14 July 2019. Prices have been rising since the 12 weeks to 1 January 2017, following a period of grocery price deflation which ran for 30 consecutive periods from September 2014 to December 2016. Prices are rising fastest in markets such as crisps, canned fish and fruit squash, while falling in instant coffee, detergents and fresh bacon.

However, there is still a strong concern about the family budget, so it is a question of striking a balance between better quality and an acceptable price. During 2018 the trend of “buying less to buy better” became popular and had an impact on volume with consumers reducing their purchase of FMCG by 1.2%. There is an opportunity though for brands who can strike the right balance: 63% of French households are willing to pay more for a better quality product.

With the interest in the environment and sustainability as a whole, many companies are developing Corporate Social Responsibility (CSR) programmes. The truth though is that this is only part of the answer – CSR is good move but, if other elements of the mix are missing, CSR alone won’t bring success. The formula for success in France still includes traditional elements: competitive pricing (including promotions), location, product range, experience and quality.

The FMCG marketing France is very complex. For a full overview of current consumer trends and the retail environment, watch the video to learn more.

Dominic Sunnebo, Global Director for Kantar comments, “Q2 2019 saw Huawei endure a number of large setbacks resulting from being placed on the US Entity list, but despite this it finished the quarter up vs. 12 months earlier. However, the impact of the adverse headlines is clear in the data, Quarter on Quarter Huawei share is down -1.9% pts in EU5 and most tellingly, June vs. May 2019 share, is down -9.0% pts. Early indications are that Samsung and Xiaomi are the key beneficiaries, with Apple seeing a smaller uptick in sales as a result. There are signs Huawei owners are putting off upgrading – likely waiting for clarity on the future situation. If this continues to be the case and the dispute is resolved it might mean that the majority of sales are delayed rather than lost to competitors, but the speed at which a resolution is found will determine this.”

In the US, both Apple and Samsung saw sales share slide, with Motorola and Google continuing their resurgence.

Dominic Sunnebo continues: “Motorola has continued its momentum in the US, with share hitting 8.1% in Q219, up an impressive +3.3% vs. a year earlier. The Motorola E5 Play and G6 Plus were top performing models, but it’s increased distribution that is the largest driver behind the upturn. Verizon remained the top channel for Motorola, but sales climbed strongly in Metro, Wal-Mart and Cricket too.”

iPhone XR was the top selling model in the US in Q2 2019, holding 7.8% share, with iPhone 8 and iPhone XS Max rounding out the top three best sellers. The latest flagship models from Samsung, Galaxy S10+ and Galaxy S10 held fourth and fifth best-selling models in the quarter.

Despite the very public trade spat between the US and China, iOS share edged up in the world’s largest Smartphone market, hitting 19.7% in Urban China. Huawei, when combined with its sister brand Honor, is close to making up one in every two sales in Urban China in Q2 2019, with 46.1% share.

Dominic Sunnebo comments: “It’s clear the US – China trade dispute is having a very real impact in Europe, but Huawei’s dominant performance in its home market will help to shelter it from the worst effects”.

Kantar’s data visualisation tool allows you to view and analyse smartphone OS market share data online. The latest sales share figures for the major operators can be viewed and compared with historical figures here and all graphics within the dataviz are available to embed in your site. 

Building a close relationship between artist and fan away from the stage might be key.  Purchases of music directly from the artist’s website, rather than on the high street or another online store, are up by nearly 30% in the past year.  Superfans are driving this trend: 35-55-year-olds buying albums and singles for themselves account for 56% of sales.   This growth is even more remarkable when you consider the declining sales of physical music across the board – highlighting the commercial opportunities available for artists who invest in these relationships.

Giulia Barresi, entertainment analyst at Kantar, says: “Direct-to-consumer music sales are a high point in an increasingly challenging entertainment market and despite being relatively small within the sector, they shouldn’t be discounted. 

“Buying straight from the source allows people to feel a closer connection to their favourite artists – something that can be lost when using a streaming service, where the entire world’s back catalogue is at your fingertips.  They can also benefit from a feel-good factor too, in knowing they are directly contributing to an artist’s success.

“There’s a big opportunity for musicians here – direct-to-consumer sales have already grown 28% year on year, but still only account for 5% of sales.  However, even streaming services like Spotify are getting in on the act, organising intimate live performances from big names to generate that connection between artist and fan – unless acts properly invest in marketing their own product, they could find themselves losing out.”

Kantar has achieved 16th place in the 2019 rankings as a Great Place to Work in Europe. This award recognises organisations who are evaluated as having an outstanding company culture, strong growth opportunities and an environment in which employees’ experiences are consistently positive.

It reflects how important is for Kantar the experience we provide to teams every day they come to work and create an environment where all people can flourish and fulfil their potential, individually and as a business. Appearing in the 2019 European Best Workplaces list is great evidence of so many people’s efforts to create a thriving company, with individuals at the heart of it. 

This award follows the recent announcement of Kantar being similarly recognised as a Great Place to Work in Brazil, Mexico, Central America and Asia. This reflects our work in creating a consistent culture and opportunities across the whole group.

“Amid the FMCG market’s recovery, we continue to see premiumisation playing an important role, as Chinese consumers favour goods that promise to improve their health and lifestyle,” said Bruno Lannes, partner in Bain’s Greater China Consumer Products Practice and co-author of the report. “While penetration and purchase frequency may be reaching their limits in some categories, there appears to be ample room for average selling prices to rise. Data on shopper behaviour over the past two years shows that brands can still encourage trading up, giving a much-needed boost to categories in which volume is either flat or slumping.”

The report gives the first indication that there is a growth limit for e-commerce. Overall, the channel’s growth slowed slightly to 30.6% between 2017 and 2018 (compared with 35.1% annual growth between 2014 and 2018). Growth for Tier 1 cities has plateaued but is expected to continue for at least three or four more years in the lower-tier cities.

This year’s report revealed renewed hope for offline retailers to regain their momentum, in many cases with smaller and more flexible formats. This is due to the increase in out-of-home consumption which has risen by 14% per year since 2016. For convenience stores it represents 88% of their total sales, having grown 17% per year in last two years.

Two developments considered in the report this year are the dramatic impact of fast-growing small brands on larger brands, and the emergence of the uniquely Chinese phenomenon of New Retail — futuristic supermarkets devoted in equal measure to in-store dining, online ordering and delivery.

Insurgent effects
Last year’s China Shopper Report revealed that China’s insurgent brands are taking a disproportionate share of FMCG growth. As that trend continues, a fundamental question faces many companies: Can big brands get bigger and continue to be successful?

“The new reality is that many incumbent brands watch small brands doing an impressive job of serving specific consumer needs, responding in everything from R&D to digital marketing with agility and flexibility,” said Jason Yu, General Manager of Kantar Worldpanel Greater China. “Whether to focus on growing big brands or building a portfolio of different brands to serve different segments nags at every FMCG executive. It’s a decision that sometimes calls for a major strategic transformation; billion-dollar brands are vastly different animals than $25 million brands and require significantly different management approaches.”

New Retail
The other big, emerging trend involves New Retail. This blurs the line between online and offline sales, with potentially major implications for how FMCG products are sold. Food delivery services are one of the biggest parts of New Retail at the moment although currently limited to Tier 1 and Tier 2 cities, with penetration levels comparable to regional supermarkets.

The acceleration of New Retail in multiple ways presents opportunities for retailers to transition to tomorrow’s seamless, multichannel world of shopping. Physical stores have a future, but offline retailers need to refine their moves to play in this new environment. Specifically, they’ll need to:

• Redesign store portfolios in the New Retail format
• Leverage new technologies like augmented reality
• Digitalize operations to deliver a seamless on and offline experience as well as to monetise consumer data for better cooperation with brands

In conclusion, this year’s report confirms that the three key implications for brands identified last year still hold true, but there is one addition:

1. Take advantage of channel dynamics: grow with the winning channels and anticipate retailers’ consolidation.
2. Develop high-value and personalized products.
3. Become data-driven, consumer-centric organizations by collaborating with platforms but also by developing your own set of consumer data.
4. Develop a portfolio of brands to satisfy the fragmentation of consumer needs and shoppers’ thirst for innovations.

Get in touch with our experts to find out more.

While GDP growth has been stablein recent years, growing on average +3.5% per year, FMCG growth has been slowing—from +6% to +2.1% since 2012. The table below may suggest growth in every region, but the data alone does not always tell the whole story. In fact, 2018 saw a continued slowdown in every market we’ve analysed—other than China Mainland and the US.

Source: Kantar

The fragmentation of the FMCG landscape continues apace. Across the channels we’ve analysed, there is an obvious divide between those doing well and those struggling to keep up. E-commerce is far outstripping any other medium—achieving 20.3% growth in 2018, accelerating on its 15% growth in 2017.

Source: Kantar

Our publication Winning Omnichannel – Finding growth in reinvented retail explores where to grow and how to win in a context in which global sales grew just 2.1%. This is our most comprehensive Omnichannel study yet, based on data from across 47 countries, representing 83% of GDP providing a unique picture of retail & shopper dynamics across the globe.

Download our new publication, watch the webinar or contact our experts thought the links at the right of this page and learn how to make the most of these findings for your business.

• A drop in the birth rate
• Decrease in purchase frequency: -0.5% on FMCG as a whole and -1.3% on fresh foods
• Traditional drivers such as innovation aren’t proving as effective
• Promotion is no longer a driver for growth and the new French regulations (EGA) discourage volume deals even further

Some of the specific trends which are playing into the slowdown could also provide opportunities for those brands who can react quickly to consumers’ needs.

#1 Less is more

The trend of consuming less to consume better is borne out with a volume decrease of -0.8% on FMCG as whole and -1.9% on fresh food products in the first quarter of 2019. People are buying less in quantity but they do want better quality.

#2 The conscious consumer

Driven by the rise in nutritional apps and media buzz, consumers are looking for products that are cleaner (free of chemicals, organic) and more traceable (local, smaller producers). This is where brands can create more value: in the first quarter of 2019 organic grew volumes by 15% and plant-based, by 22%. Buying from small producers is also popular and we see an increase here of 1.7% in the same period.

#3 Fragmented consumption

Consumers now have a wider repertoire in terms of how they shop, where they shop and what they are buying. Shopping both online and offline has been well documented but people are also visiting a wider number of retailers (7.8 retailers in 2018 vs 7.1 in 2008)

Eating habits are changing significantly which impacts what is bought. There are now more meals eaten out-of-home (+13% vs 2014), more snacking at home (+9 million occasions per week vs 2014) and meals take a simpler form or are even skipped altogether. Delivery food and occasion marketing will be big drivers of growth in the future.

#4 Reducing impact

Consumers are becoming more aware about the impact of their actions and their purchase habits which is encouraging them to change how they consume. They want brands to support them with this, 86% of French households intend to adopt responsible consumption and this is a transgenerational phenomenon.

Responsible consumption can take different forms: ecology, plastic packaging, fairness, consuming better, local, animal welfare, etc. All are considered important by consumers, but the market and brand environments need to be taken into account to ensure the targeting is as accurate as possible.

To be successful in the future FMCG players need to be mindful of all of these trends, but as much as they can be challenges for the short term, they also provide opportunities for the future. In conclusion, the key ways that brands can react to consumer needs and grow are to:

• Reassure by being transparent, sourcing and making products as natural as possible
• Commit to CSR, the new brand strategy KPI to follow
• Broaden the scope of what is possible: distribution channels, moments of consumption, etc.

It might be a more complex environment but it is also a great opportunity to be creative and stand out from the crowd, provided this is done in an authentic and transparent way.

Douglas Faughnan consumer insight director at Kantar comments: “Last June was one of the hottest in years, with over 100 more hours of sunshine than the year before. The first half of June this year has been a different story, with fewer opportunities to sunbathe and socialise outdoors. This has led to sales of ice cream and sun care products declining dramatically on last year – down 9.2% and 38.0% respectively.”

“Drinks sales have also experienced a slowdown. While cider was a particularly popular choice this time last year, its current growth of 0.1% is considerably lower than the 14% experienced last summer.”

However, while there is no men’s World Cup this year, Irish retailers have benefited from four English teams reaching the finals of major European football competitions. By stocking up on snacks and treats, football fans helped sales of crisps to increase by 2.5%, popcorn by 6.4% and soft drinks by 5.0% in the most recent 12 weeks.

Dunnes’ impressive growth of 7.2% is underpinned by a substantial increase in spend per buyer.  Douglas Faughnan continues: “The average Dunnes shopper spent almost €20 more this period compared with the same time last year through a combination of higher prices, bigger trolleys and more frequent trips - shoppers on average bought an additional six items from Dunnes this period.

The average Tesco customer made one additional trip to the retailer in the most recent 12 weeks compared with last year, contributing to growth of 3.0%. However, while there has been an increase in how often shoppers visit, this has been tempered by them spending €0.80 less each time. Tesco has successfully cashed in on Irish shoppers’ appetite for soft drinks this period, with carbonated beverages and mineral water growing by 17.5% and 11.9% respectively.

Meanwhile, Aldi and Lidl’s rise shows no sign of abating. The retailers registered growth of 13.3% and 5.8% respectively this period. Douglas Faughnan explains: “Aldi now accounts for 12.3% of overall grocery sales in Ireland and has enjoyed particularly strong growth in more indulgent categories over the past 12 weeks. In particular, sales of biscuits grew by 20%, chocolate confectionery by 50%, and morning goods like croissants were up 23%.

“Lidl’s 11.7% share has been underpinned by strong performance in Munster, which now accounts for 26.1% of the retailer’s overall sales. However Dublin remains Lidl’s heartland and is responsible for almost a third of its sales. In-store bakeries continue to help the retailer to stand out. Bakery products are up by 15% year on year, predominantly driven by an 18.2% increase in bread sales.”

Growth of 1.9% for SuperValu was the highest rate the retailer has seen since August 2018, and the retailer registered a market share of 21.1% this period.

Among the top retailers in modern trade, Yonghui and Vanguard enjoyed the fastest growth in market share, up by 0.4 and 0.2 points respectively compared to the same period last year. Both Yonghui and Vanguard accelerated their pace on their adoption of new retail. Vanguard formed a partnership with Dmall to facilitate food-to-home delivery service in Tianjin and collaborated with JD delivery, Meituan and Ele.me to roll out home delivery services nationwide. 

The e-commerce channel grew by 44%, with 54% of households in urban China purchasing FMCG online over the last 12 weeks. Online penetration in counties reached 44%, up by 12% compared with the same period last year, and the gap with upper tier cities narrowed further. Alibaba showed ambition to win more share and attract young people by introducing “buy local” campaigns and innovative social games for the mid-year 618 festival. Kantar Worldpanel expects that more innovative social media driven campaigns and joint online and offline activation will stimulate consumer demand to achieve record- breaking sales.

According to the report, there have been 30% less new product launches across the fast-moving consumer goods (FMCG) sector since 2010. Even though the economy has recovered in the last four years, pre-crisis innovation levels have not returned, which reflects a clear market failure. Despite the difficulties, manufacturers’ brands continue to be the drivers of innovation. They were responsible for nine out of 10 of the 109 new products launched on the market in 2018, amounting to 94% of the innovative new products.

Despite the efforts of brands to innovate, their presence in some important retailers remains very low. Mercadona, only lists 23% of the new innovations, Aldi, 11%, and the chain with the least innovations listed is Lidl, with 8%. Conversely, there are chains that introduce many new products to their shelves, such as Carrefour (84%), Alcampo (69%), El Corte Inglés (61%) and Eroski (52%). However, the distribution of new products remains very low, averaging 28%.

Being present in the main retailer channels is a decisive factor when it comes to the success of a new product in the market. According to the details of the report, products that arrive on the shelves of the top three retailers have a success rate of 86%. In contrast, if business practices do not allow innovative products to reach the distribution centres, the rate falls to 31%.

Innovation is synonymous with success. As the last few years of the study have shown, the success rate of new innovations has grown by 45% to reach 79%. The success of a new product largely depends on the degree of innovation and on whether it satisfies important needs that have not yet been met. Furthermore, it is frequently aimed at new users, new moments or new uses.

The most successful product launch in the FMCG sector in 2018 was Ladrón de Manzanas (Heineken), followed by Soluble 70% Cocoa (Valor). In the food category, the most successful innovation was Donettes Troleo (Bimbo), and in household and personal care it was the Lotion&Go Natural Honey spray-on lotion (Revlon). Manufacturers' rands are responsible for nine out of ten of the most successful innovations.

César Valencoso, Consumer Insights Consulting Director, Worldpanel Division, Kantar says: “We are currently in the most favourable environment for innovation that we’ve been in a decade, but despite this, the levels of innovative product launches remain worryingly low and, in most cases, they are sustained by strong brands that improve their listing and success rate, but this does not resolve the underlying problem. To reverse this situation, the entire industry must equally push and align their efforts to promote innovation as a shared need which will benefit the FMCG sector”.

Ignacio Larracoechea, president of Promarca, concludes: “It’s important to remember that innovation is fundamental for the growth of the sector and for GDP, to which brands contribute 7.4%. Brands make a huge effort to lead innovation in the sector and are responsible for 94% of new products. Bad practices, such not listing enough innovations or poor copies, lead to a loss in value and reduce consumers’ options. This market failure needs to be urgently resolved, since consumer well-being and increased R&D investment heavily depend on this. We have to be able to change this 30% loss”.

Note to the editors:

For the purpose of the study, the following definition of innovation was used: it encompasses all EANs that include a new attribute value, except brand and format (weight or litres), both if the EAN is new, or if it already exists and the codification has been changed and this change incorporates the new value. New combinations are not included, i.e., when an attribute value linked to a brand (not new) appears for the first time. It is, therefore, the only study in Spain that reflects the true level of innovation on the market.

This has been driven by consumers, demanding more and more from every occasion. We’ve moved beyond physical functionality benefits like taste, thirst and fluid replenishment, to a more sophisticated level of needs. 

Behind every beverage consumption choice there are specific benefits that consumers are seeking to meet their needs in the moment. The key to success in this ever crowding market is for manufacturers to make sure they are asking themselves three important questions:

1. Who is my true competitor?
2. What mindset are we targeting?
3. Is my product messaging relevant today?

Trends don’t happen overnight but fads do come and go. We invite you to take learnings from the trends over the last 30 years to understand how consumer needs have truly evolved. This way, brands and manufacturers can identify real opportunities for growth and avoid getting caught in a fad.

Our expert Sophie Crole went through the main findings in a webinar that can be watched on demand through de link at the right of this page. Watch it and hear in more detail how and why the beverage market has evolved in the US, and identify potential levers for growth.

Download the paper through the link at the right of this page.

Fraser McKevitt, head of retail and consumer insight at Kantar, comments: “The modest level of current growth is thanks in no small part to the wet start to the summer, with last year’s heatwave and the run up to the men’s FIFA World Cup making 2018 a difficult year to top. These challenges are reflected in typical summer categories: in the past four weeks sales of ice cream were £15 million lower than this time last year, while beer is down £17 million and burgers £6 million.

“However, even unseasonable clouds have a silver lining. Shoppers sought refuge from the cooler weather and spent more on traditional comfort foods, with fresh and tinned soup sales up by 8% and 16% respectively.”

Aldi attracted an additional 883,000 shoppers through its doors this 12 week period, with sales up 9.3%.  This helped the retailer to grow its market share to 7.9%, up by 0.5 percentage points on one year ago. Fraser McKevitt continues: “Aldi’s announcement that it is rolling out more small, ‘Local’ format stores in London looks like an attempt to increase its share in the capital, where it currently takes home just one out of every £30 of supermarket spend.  Grocery sales growth in London currently stands at 4% year on year, nearly three times the national rate, showing why all retailers see the capital as a major area of potential.”

Rival discounter Lidl, having recently announced plans for a flagship store on Tottenham Court Road in central London, also has eyes on the capital’s convenience market. However, Lidl’s current ‘Big on the Big Shop’ advertising campaign is focused on increasing the number of large shopping trips it attracts. Nearly two-thirds of its current growth is from shoppers spending more than £25 in one go, and Lidl clearly sees value in encouraging a weekly shop. Overall the retailer enjoyed another strong period, with sales up by 7.5%, lifting its market share to 5.7%.  

Growing by 3.0%, Co-op also increased its market share, now commanding 6.2% of British grocery sales. Fraser McKevitt explains: “Co-op is continuing to enjoy success in London and the South, where new store openings have helped make the region its largest area of growth. The convenience retailer already boasts the highest shopper frequency in the market as customers regularly pop in for smaller baskets and this has increased even further in the latest period: the average shopper stopped by 22 times over the course of 12 weeks.”   

Online specialist Ocado was the UK’s fastest growing supermarket, with sales growth of 11.3% comfortably ahead of the overall e-commerce market at 6%. However, only 3% of British shoppers currently buy from the retailer, something it will be looking to build on when it begins to stock M&S products next year. The remaining retailer to enjoy growth this period was Iceland, with sales up by 0.6%, although its market share slipped by 0.1 percentage points to 2.1%.

Tesco sales were flat year-on-year despite an increase in volumes sold. This was caused by the average price paid per pack falling as sales of its value own label lines like Eastman’s and Redmere Farms increased by 11%, and its ‘100 Years of Great Value’ campaign continued to offer lower prices. Tesco remained the country’s largest retailer, although its market share fell by 0.4 percentage points to 27.3%.

Sainsbury’s saw its sales fall by 0.6% in the latest 12 weeks, halving the rate of decline it registered last month. This is because of an increase in the number of affluent consumers visiting the retailer, with ‘AB’ shoppers increasing spend by 2% this period. Fraser McKevitt elaborates: “The rise in wealthier shoppers bodes well for Sainsbury’s and its plans to shake up its fresh offer, which will place more emphasis on counters, bakeries and food to go. The retailer will be hoping this provides another reason for shoppers to visit.”  

Meanwhile, Asda’s sales fell by 0.1% though it will be buoyed by the performance of its online arm, which enjoyed double-digit growth of 10%. Asda’s share of the overall market fell by 0.2 percentage points to 14.9%, while Morrisons’ sales decreased by 0.5%, lowering its share to 10.4% of grocery sales.

Waitrose’s share this period slipped back by 0.1 percentage points to 5.0%, with sales remaining flat compared to a year ago.  Fraser McKevitt continues: “Waitrose received good publicity this month for its trial of packaging-free goods in one of its Oxford stores, where shoppers were encouraged to bring their own containers. Six per cent of the retailer’s sales are already sold loose, a greater proportion than any of its rivals, showing an appetite for more sustainable packaging among its customers.”  

An update on inflation

Grocery inflation now stands at 1.0%† for the 12-week period ending 16 June 2019. Prices have been rising since the 12 weeks to 1 January 2017, following a period of grocery price deflation which ran for 30 consecutive periods from September 2014 to December 2016. Prices are rising fastest in markets such as crisps, bottled cola and dog food, while falling in instant coffee, fresh bacon and detergents.

Although watching every single movie in the Marvel franchise was not a pre-requisite to enjoying Endgame, there are many loyal fans. Our analysis indicates that over half of Endgame’s cinema goers in the first 10 days of release had either seen Avengers: Infinity War in the cinema last year or when it was available on home entertainment. This is a significant overlap and indicates the level of investment many Marvel fans have put into the franchise.

The best part for Disney is that not only do these dedicated fans love the cinema, they want to keep engaging with the content. They buy it on 4K to re-create the cinematic experience in their own home and then display it on their shelf in pride of place.

A third edition of the Online Fashion Report in Spain, prepared by Kantar and Modaes.es, with sponsorship from Prodware, outlines the main indicators and statistics linked to online shopping (both in general, and specifically for fashion). Issues covered include the ability to get online, the profile of online shoppers and a consideration of both the drivers and deterrents for e-commerce.

The role of e-commerce in fashion is also significant in terms of volume: last year, more than five out of every 100 items of clothing sold in Spain was online.

Shopper profile: educated, urban women

Educated, urban women continue to be the most significant online fashion buyers in Spain. The typical profile is between 35 and 54 years old, living in a city with a population of over 100,000, with a higher-level education. However online fashion is becoming more diverse and appealing to a wider range of people.

Consumption patterns by area

This edition of the report looks at online fashion consumption patterns according to where people live. In this respect, the biggest average purchase, 6.7 units, was recorded among consumers who reside in large metropolitan areas. Shoppers in small towns with less than 30,000 inhabitants however spend the most: an average of €143.40 per person, per year. The online channel has the greatest penetration in urban areas with between 30,001-500,000 inhabitants, where it already reaches 28.1% of the population over 15 years old.

The average annual spend

Overall, Spanish consumers’ average annual spend on online fashion last year was €135.80, compared to €127.80 the previous year, and €107.40 in 2016. These shoppers purchase an average of 6.5 items a year and each product purchased online costs around €20.90, compared to €21.10 last year.

The report also reflects the stake bricks and mortar stores have in the online channel, and the growth they have enjoyed due to online purchases. For the first time this year traditional retailers won more sales than the pure players, with a share of 51.3%. For their part, digital natives, who accounted for nearly 80% of online fashion sales in 2012, only represented 48.7% last year.

Jaime Diez, Fashion consultant at Kantar, states that, “as well as knowing how the customer behaves in a shop or on the web, it is essential that brands and retailers know their potential customers: who they really are, how and where they shop, and that they understand how to gain new buyers in order to access sources of growth for their business”.

Pilar Riaño, director of Modaes.es, stressed that not only is the digital channel of increasing importance for the fashion industry, but “it is also experiencing its own transformation, as the way in which clothing is searched for and bought online is constantly changing”. Therefore, she continues, “fashion companies constantly need up-to-date information on the evolution of this channel and the preferences and behavioural patterns of consumers. In this respect we hope that this third edition of the report will help them to gain some valuable insights”.

For his part, Iago Oro, Prodware’s Retail and Customer Centric director, highlights how “in the omnichannel era, the offline titans, who started to change just in time, have overtaken the pure players, making on- and offline integration their major competitive advantage”.

Please contact us for the full report.

Methodology
The report was prepared using information obtained from various public and private sources to get a more accurate snapshot of the current industry situation. The study compiles and analyses information obtained from Kantar’s consumer panels, the latest data published by the Spanish National Commission on Markets and Competition (CNMC) on Internet sales across all sectors, the Survey on Equipment and Use of Information and Communication Technologies in Households from the Spanish National Statistics Institute (INE), and the B2C Electronic Commerce Study, compiled each year by the Spanish National Observatory of Telecommunications and the Information Society (ONTSI), among other sources.

Is 8K TV selling?
Latest tracking from Kantar’s Worldpanel ComTech shows that 8K currently only accounts 0.4% of TV’s owned in EU5 (France, Germany, Italy, Spain and the UK) which is not surprising given the availability and the price.

Piers Moore, Global Insight Director at Worldpanel division, Kantar said: “We forecast 8K ownership to be no more than 1% by the end of the year. However, strategically 8K is not about driving volume – it is to drive value and excitement in the category, with the hope of creating a halo affect within the super-premium end of the market”.

Why consumers will be slow to adopt 8KTV

1. 4K TVs are still building share
Whilst consumers are adopting 4K TV we are still not all watching 4K content as even 4K content is not widely available. Upscaling technology is being used to adapt HD content into 4K content, so the suggestion of 8K TV upscaling is almost a step too far. How do manufacturers communicate the benefits of 8K to customers and why it is worth the extra cost compared to 4K? Piers Moore comments: “Only 10% of TV’s owned across Europe are 4K and most consumers have only just become comfortable with what 4K is. To then try to get them to buy into 8K will be even harder.”

8K technology means that TV manufacturers can make TVs larger without losing picture quality. Kantar shows that in Q1 2019 nearly 5% of all TV’s owned were 60” or larger which is 2ppts more compared to Q1 2018. So, while consumers are moving towards larger TVs, it does feel like we are heading towards a ceiling on what works for most consumers living space.

2. Lack of 8K TV content
Just because you have an 8K TV it doesn’t mean that everything you watch is in 8K. 8K TV content needs to be created, and there is currently a huge content gap. With hardly any 8K TV content available, why would consumers buy an 8K TV as they won’t immediately see all the benefits? This is a challenge for marketing to potential customers.

However, upscaling technology can help to improve lower resolution pictures in an 8K environment. Despite 8K content not being readily available at the moment, upscaling does make the 4K content look sharper on 8K TVs. Piers Moore adds: “Customers who are buying 8K TVs are the most premium purchasers. If they are buying the most premium TV then they feel it is worth purchasing 8K compared to 4K, so when 8K content is available they will not have to purchase again, in essence future-proofing themselves”.

Interestingly Sony is potentially in a strong position because of access to Sony Pictures so there is more scope to develop specific 8K content, although generally we can predict that Amazon and Netflix will probably be primary content providers for 8K TV.

3. Pricing of 8K TV
The Samsung Q900R was available to purchase in Europe as of October 2018 and released an improved second generation Q950R earlier this year. The Samsung 65” QLED Q905R is currently the lowest priced 8K TV on the market with a retail price of £4,999.

Sony Europe started selling its first 8K TV’s (ZG9 series) this month. Sony’s lowest price 8K offering is the 85” ZG9 which currently retails at a whopping £13,999.

LG has announced its first OLED 8K (88Z9) TV will be available to buy in Europe during Q3 2019. Price expectations are even higher for the LG OLED 88” when it comes to market in Q3 this year.

At these price points it is potentially removed as an option for mass consumption purely on price and, therefore, high sales volume cannot be the strategic objective for 8K TV.

So, why launch 8K TV?

In a nutshell it is about showcasing innovation and technological leadership. 8K is the latest technology TV manufactures are pushing as they looking to prove to customers that they can deliver the latest innovation in resolution.

Piers Moore continues: “The reason it is important for TV manufactures to get out ‘in-front’ of the competition with new technology such as 8K is that it helps them to be seen as the brand that offers the latest innovations from a customer’s point of view. This plays a crucial role in getting consumers to spend more and helps convert potential premium customers into sales – it was cited as the second most important reason more premium customers bought a brand of TV in Q1 2019.”

8K TV will appeal to affluent early adopters. Experience tells us that early technology adopters can be very influential and drive wider adoption, so developing technology for this group is key for long-term brand success.

If you would like to learn more about TV trends and how we track them, please get in touch with our expert through the button on the right side of this page.

Yili, Indomie, Ottogi, Maggi, Lucky Me, I Mei and Vinamilk are this year’s most chosen brands in Asia

Alongside the publication of the seventh Global Brand Footprint report, we have newly launched Asia Brand Footprint report specifically focusing on Asian markets – China Mainland, Indonesia, Korea, Malaysia, Philippines, Taiwan and Vietnam.

Within the first Asia edition, we reveal the top brands being chosen the most by consumers in the whole region as well as in each market across five sectors: Beverage, Food, Dairy & Dairy Substitutes, Health & Beauty, and Home Care.

Top 5 most chosen brands in each individual Asian market

China Mainland Top 5 

Indonesia Urban Top 5 

South Korea Top 5 

Malaysia Top 5

 Philippines Top 5 

 Taiwan Top 5 

 Vietnam Urban 4 Key Cities Top 5

Asia though is diverse and fragmented with different cultures and consumer behaviors, the growth levers are brought together in a few common themes centered around the consumers’ fast-changing needs. To help brands look into the recipe for brand growth, we examine real case studies with their successful stories as well as conduct executive interviews with their leaders to see how these brands found growth.

Marcy Kou, CEO Asia, Worldpanel Division, Kantar, said: "Consumers are becoming more discerning, informed and well-traveled. As a result, they are exposed to more options, ideas, products, and perspectives. All this influences, shapes and changes their perception and demands to where making a purchase is not just about a product, but what else the brand offers, including a complete shopping experience for them as consumers."

Download the report through the link in the right to find out how brands in Asia and in each local market have managed to be picked off the shelves most often and explore the data at the microsite.

E-commerce is a major channel driving growth in the sector. The average growth rate of food and beverages through all channels is 3%, however the growth rate in e-commerce hit reached nearly 30% in 2018. The value contributed by e-commerce rose from 48% in 2017 to 73% in 2018. Jason Yu, Managing Director, Greater China, Kantar Worldpanel, suggested that e-commerce should be a priority for any food and beverages enterprise and is not limited to e-commerce platforms but should also include WeChat business and other social e-commerce channels.

Another hot spot of growth is lower-tier cities where, due to product availability and rising incomes, market share has jumped from 50% in 2017 to 57% in 2018.

Beyond these areas though it is hard for brands and retailers to find growth, but Kantar has identified some key target and techniques that they could focus on.

Key targets

The top three target markets for the next 5 to 10 years.

1. The 60+ market

In China, 60-year olds currently account for 17.9% of the population and this will rise to 25% by 2025, representing a potential consumption value of 2,831 billion Chinese yuan. According to Kantar’s data, the compound annual growth rate (CAGR) of elderly singles and couples hit 7% in 2018. The elderly also tend to prefer premium food products, particularly those promoting health or with added value.

Although currently online shopping accounts for just 7% of their overall consumption, they are warmly embracing the internet era. The online purchasing growth rate for the elderly is now 41.8%. As you might expect those in the more developed regions of China, particularly the first and second-tier cities in the east and south are the faster adopters of online shopping.

2. Young people in China’s low tier cities

Based on Kantar’s data, young families living in low-tier cities account for 63% of the overall young families in China’s urban and rural areas. The value of food and beverage products consumed by rural young people hit 236.6 billion Chinese yuan in 2018. The penetration of e-commerce and the developments in supply chain, particularly logistics, is a major factor contributing to the surge in growth seen in China’s developing areas. Driven by the pursuit of a better lifestyle, rural young people in these areas are more willing to purchase high-end products online, such as grape wine, healthy food and cheese.

Consumption preference varies in different geographic areas. For example, acceptance of western consumption habits is more commonplace in eastern China, so ready-to-drink coffee and olive oil are more popular. While in western China, people enjoy a leisurely life and focus on convenience.

3. Generation Z

GenZ are fast becoming the consumer group with the greatest spending potential in China accounting for approximately 150 million people, nearly 10% of the total Chinese population. GenZ is expected to account for 40% of all spending on consumer goods in China by 2020 as they will soon come of age and have a greater influence in household purchase decisions.

According to Kantar the disposable income of GenZ is 3,501 Chinese yuan, which is much higher than the average salary in Shanghai (2,400 Chinese yuan) and Hangzhou (2,100 Chinese yuan). GenZ place a high priority on novel experience and are willing to try new products and their spending is mainly motivated by social status, public persona and self-happiness. 

Top techniques

As well as focusing on the right targets, Kantar advise on what can make brands stand out to shoppers in a competitive marketplace.

1. Product differentiation

Offering something different is key in a slow marketplace, for example offering advanced ingredients, using the latest technology to manufacture or innovative packaging. New flavours are another way to achieve this as consumers are keen to try something different. An example is Mengniu’s avocado flavoured BB-12 yoghurt which now accounts for 50% of all BB-12 sales.

2. Product placement and brand building using social interaction

Social interaction is an important element of a complete market strategy for food companies. In August 2018 Oreo launched a “tasting project” in China, allowing participants to create a novel flavour with people then voting for which one should be produced. This promotion went viral on social media and attracted one million participants. Another excellent example is seen in the case of Korean food brand Orion which used a popular game to promote is new product during the 2018 World Cup.

New opportunities are emerging in this space all the time. Kantar data shows the food and beverages sales value contributed by WeChat rose from 6% in 2017 to 16% in 2018, with a penetration rate of 14%. More and more food brands are now cooperating with social e-commerce platforms such as Pinduoduo and have launched customised products targeted at consumer groups active across these platforms. 

3. Use new retail to create consumption demand

New retail integrates online and offline channels, and it offers new and interesting opportunities to food marketers. The recommendation of influencers is extremely popular in China and has proven to be an effective way to sell products, allowing consumers both a more intimate interaction with the brand and the ability to make an immediate purchase.

Many e-commerce platforms offer new promotion opportunities. Freshhema (a new retail platform owned by Alibaba), for example, offers consumers targeted product recommendations and useful content which vary based on the time of the day.

Kantar believes that despite a tough market there are always opportunities to grow so long as brands invest in understanding their marketplace and stay open to new opportunities.

Online sales of fast-moving consumer goods (FMCG) grew by 20.3% globally in 2018 and now represent 5.1% of grocery sales worldwide, according to new Kantar data. Growth was spurred by the US and China Mainland, which together represent 84% of the growth in global e-commerce thanks to the success of Amazon, Alibaba, JD.com and Walmart.

FMCG value growth, 2018

Source: Kantar, GfK, Intage, full year 2018
*Estimate Kantar & US Commerce Department

A high penetration of online purchases in Asian economies are made via smartphone, meaning these countries continue to lead the way in terms of online FMCG shopping. Over 19% of all FMCG sales in South Korea now come from online, the highest proportion in the world. China Mainland follows with 14.0% – though based on current growth rates and the fact that nine in ten online purchases are already made on a mobile, it is expected to overtake South Korea’s position by 2025. Taiwan’s online share of FMCG sales stands at 8.2% and in Japan it has reached 7.7%.

In Western Europe[1] 4.1% of grocery sales came through e-commerce, primarily led by the UK at 7.2% and France at 5.6%. However, plateauing shopper numbers in both countries mean growth was slower than in the previous year. In contrast, e-commerce sales grew by almost 35% in the Netherlands, where start-ups like Picnic have contributed to a total of 4.5% of FMCG sales now coming through online.

In Eastern Europe[2] online FMCG is less developed, accounting for just 1.9% of sales in 2018. Only the Czech Republic and Russia registered more than 1.5% of sales online in the region, with 3.3% and 2.2% respectively.

Equally, online FMCG shopping in Latin America remains nascent. While Argentina leads the way, only 0.6% of sales come through e-commerce and this is no increase on the year before. Concerns about security and limited payment methods are still barriers for local consumers in shopping on the web.

Online sales, % of total FMCG sales

Source: Kantar, GfK, Intage, full year 2018
*Estimate Kantar & US Commerce Department

Pure players driving growth

Globally, it is the online pure players like Amazon, Alibaba and JD.com which are winning in the e-commerce market as they continue to attract new shoppers. Pure players now represent 72% of online sales, posting a staggering collective growth of 29% in 2018. In the face of this competition, retailers operating across both bricks and mortar and e-commerce channels grew by only 3% in comparison, though reducing the delivery delay and offering free, or cheaper, options would help multi-channel retailers to close this gap.

The pure play giants are dominating on both sides of the globe – Amazon now represents 53% of all FMCG online sales in the US. While Amazon has not yet been able to hit equal heights in Europe, it has achieved online FMCG market shares of 8.8% and 5.0% in Germany and France and is up to 3.2% in Spain and 1.0% in the UK.

Pure players vs traditional retailers, % value share of online FMCG

Source: Kantar/ GfK, full year 2018
*Estimate Kantar & US Commerce Department

Eric Batty, global e-commerce business development director at Worldpanel Division, Kantar, comments: “While online sales for multi-channel retailers in Europe tend to focus on traditional food and drink products, Amazon’s sales are more heavily skewed towards personal care. In France, for instance, while Amazon is the online leader in personal care for food and drink it ranks only seventh. There, traditional bricks and mortar retailers have found success through in click-and-collect, with the likes of E.Leclerc 20 times bigger than Amazon for online food sales thanks to its DRIVE pick-up points.”

Online to be the leading channel in Asia by 2025

Kantar predicts that online will represent close to a third of total FMCG sales in China by 2025 and a quarter in South Korea. In the UK and France, those figures are expected to hit 9% and 8% respectively in the same time.

Stéphane Roger, global shopper and retail director at Worldpanel Division, Kantar, comments: “By 2025, e-commerce will represent 10% of all FMGC spend across the globe, twice its current size. On and offline integration, intelligent technology and direct-to-consumer options will all help to attract new shoppers online, where currently penetration is at just 21%.”

Predicted online FMCG share in 2025, %