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Much has been said and written about the migration of grocery dollars from the supermarket arena to other forms of retailing. It's a popular source of hand wringing in corporate boardrooms and grocery industry forums, surely. But the real story is playing out on the selling floors of grocery stores, supercenters, warehouse clubs, discounters, and drug stores across the country -- and, more tellingly, in the minds of the consumers who are making the decisions day to day about what products they'll buy, and where. The rubber hits the road at the category level.
That's why Progressive Grocer, in partnership with ACNielsen, assembles the statistical evidence that comprises the annual Product Preference Study. This is a national benchmark by which retailers can calibrate their own compasses, combining this macro-level analysis with their local market intelligence to help set department and category strategies for assortment, pricing, and promotion. It's based on the daily purchases of the 61,500 consumer households that comprise the ACNielsen Homescan Panel.
While the Homescan Consumer Facts data offers many lenses through which to view and try to understand consumers' purchases -- last year, for example, we looked closely at purchasing behavior by lifestage -- this time around we've chosen the perspective that goes right to the heart of the competitive landscape: percent of dollars broken down by major retail channel.
Some of the competitive flags are easy to spot in that landscape. For example, the department-by-department and category-by-category comparisons reveal that supercenters have solid double-digit chunks of virtually every category under the sun. Warehouse clubs are double-digit players in about 30 departments or categories, including notable arenas such as wine, meat, many kinds of snacks, beverages, prepared foods, paper goods, and even HBC. Mass merchants and drug chains are making their marks -- and deep marks they are -- largely in nonfood categories. The pressure from mass merchants, drug chains, and price clubs is especially acute in the health and beauty care aisles.
The Homescan data also makes it clear that supermarkets -- defined by ACNielsen as food stores with $2 million or more in sales per annum -- still have a commanding lead in just about every category. What this report doesn't show, limited as we are by space constraints, is where the erosion has been taking place over time. But the lines of battle should be easy to decipher.
As we did last year, PG also added to this report with a more in-depth look at a number of representative categories. The category spotlights offer breakdowns of top 10 categories by percentage of total sales dollars in various major channels, using ACNielsen Homescan.
The spotlights also analyze the action at the brand and vendor level, with the help of data from Information Resources, Inc. Methodology
Data for the category overview, percent of dollars by retail channel, and the top 10 by percent of dollars is from the ACNielsen Homescan Panel for the year ending Dec. 31, 2005, which contains the purchasing history of 61,500 households drawn to mirror the profile of total U.S. households. This data includes UPC-scanned consumer packaged goods categories, but excludes perishables that aren't scanned.
Category vendor and brand data is provided by Information Resources, Inc. This data includes total U.S. food sales only (excluding supercenters) for the 52 weeks ending April 23, 2006. Findings are based on an extensive analysis of data from IRI InfoScan & Reviews, a syndicated version of the Infoscan Tracking Service that serves as a common source of scanner-based information for manufacturers, retailers, food brokers, financial analysts, and trade publications.
The PPS Report itself will shortly be posted on the Reports & Analysis section of the Web site.