Nielsen shares top five CPG spending trends for 2010
NEW YORK Nielsen is projecting the top five consumer goods spending trends for 2010 as consumers continue with their newfound thriftiness.
Nielsen said that their research revealed that consumers’ fundamental spending adjustments are likely to last in the next year.
The projected trends include:
- Restraint remains the new normal: Americans’ confidence has been slower to rebound compared to other parts of the world. The need to save money, unemployment and other economic issues continue to be top of mind, suggesting that any return to past behavior may take some time—if at all.
- Value is a top priority: With no signs of readiness to open wallets, a focus on low prices at the expense of all other variables threatens margins. Value messaging must also include some point of differentiation beyond pricing. Manufacturers and retailers that “drive the recession wave” and take an active role in innovation and ad spending are likely to be the big winners.
- Store brand growth continues: Even with year-end 2009 softness in store brand dollar share growth as retailers cut prices across the store to be more competitive, unit share growth continues and retailer focus has never been stronger.
- Grocery consolidation intensifies: Local and regional players, unable to drive profits in the soft economy, will become acquisition targets and some larger national and regional grocers will divest unprofitable formats and banners to strengthen investments behind their winning formats and banners.
- Assortment wars escalate: Retailer efforts to simplify the consumer shopping experience by eliminating aisle and shelf clutter will cause market share land grabs for small and medium-sized brands in pursuit of elusive revenue growth. Retailers may lose sales as they shift away from in-store merchandising that drove impulse buying and built shopper baskets. Look for brands caught in the trap of greater store brand focus and assortment optimization to forge alliances with key retailers, enter or step-up efforts as store brand suppliers, and/or explore direct-to-consumer sales.
Nielsen, Catalina Marketing announce joint venture
NEW YORK One of the world’s largest providers of media and consumer information and analytics announced its joint venture with a global leader in consumer-driven print communications.
The Nielsen Co. and Catalina Marketing Corp. have formed Nielsen Catalina Ventures to create the next generation of precision media solutions and return on investment measurement tools to allow consumer packaged goods and media companies to more effectively link the marketing exposures consumers see with what products they actually buy.
The 50-50% joint venture will integrate information from Nielsen’s industry-leading TV, Internet and household purchase panels, with purchase data from more than 50 million shoppers from a cross-section of retailers in Catalina Marketing’s network.
“As consumers become more sophisticated and media platforms continue to fragment, advertisers must be able to build more precise and measurable media plans,” said David Calhoun, chairman and CEO at Nielsen. “The only way to get there is with faster, deeper information. Nielsen and Catalina’s combined capabilities provide comprehensive, scalable solutions for clients to better shape their marketing investments and measure their campaign ROI with far greater precision, speed and agility. We are pleased to partner with Catalina Marketing in this first step toward a holistic measure of ROI that will redefine accountability in the CPG space.”
Nielsen Catalina Ventures will launch its first precision media solutions in the first half of 2010. Nielsen’s existing television and online precision media businesses, which currently use Nielsen’s Homescan purchase panel to match media consumption with purchase behavior, will be integrated with Catalina Marketing’s shopper data. This will allow analyses for many more brand campaigns than is currently possible. And for the first time ever, the television offering will be based on data from Nielsen’s National People Meter panel, the industry currency, to create solutions for measuring the sales impact of TV advertising campaigns.
Costco takes another bite of the Big Apple with new Manhattan unit
NEW YORK —Costco opened its first store in Manhattan on Nov. 12, in Spanish Harlem. Though the store is the fourth in New York City—following stores in Brooklyn, Queens and Staten Island—Costco had to make a lot of changes to fit the store into such a tightly packed area.
“It’s a challenge relative to the size,” Costco CEO Jim Sinegal told Drug Store News. “We had to crowd a lot in and configure it differently.”
The store has many of the products and departments familiar to Costco shoppers, including a pharmacy, but it had to forgo products that would not suit most New Yorkers, such as patio furniture and giant bags of pet food.
“We’ve probably come down a little bit on the bulk items,” EVP and CFO Richard Galanti told Drug Store News. “With that exception, we’re trying to offer the full breadth and depth of what we typically offer.”
In terms of the pharmacy, the store’s location has led it to serve the neighborhood’s many Spanish-speaking inhabitants. “One of the things we do is have plenty of Spanish-speaking employees,” regional pharmacy manager for the Northeast Tom Drougas said. “That’s always a plus.”
As required by law, the pharmacy also has Language Line, a service that allows speakers of numerous languages to receive translation services from trained staff over the telephone. Customers also can consult with staff through the pharmacy’s patient consultation window or in the private consultation room, which includes a DVD player allowing patients to watch videos about disease states.
Despite the slightly smaller size, the store mostly is the same as others in the chain, including in terms of prices. “I think that’s a novelty for Manhattan, right there,” Sinegal said.
According to published reports, Costco plans to open another store in Queens next year.