U.S.+Retailing+and+Consumer+Trends++V6+Retailing+Part+1.ppt

U.S.Retailing&Consumer Trends,July,2009Todd HaleSVP Consumer&Shopper Insights,Version 6(1 of 3),Page 2,U.S.Retailing&Consumer Trends,Retailing TrendsRetail Channel DemographicsBuying TrendsConsumer Trends,Topics,Page 3,U.S.Retailing&Consumer Trends,Page 3,Retailing Trends,Page 4,U.S.Retailing&Consumer Trends,Value&Convenience Winning as Evidenced by Increased Store Count,U.S.Store counts,Supermarkets have not grown at the rate of other retail channels no wonder the channel has lost shopping trips!,Source:Trade Dimensions&TDLinx,services of The Nielsen Company,1,419 fewer stores since end of 2007,Page 5,U.S.Retailing&Consumer Trends,Variety Winning as Evidenced by Increased Stores from Category Killers,U.S.Store counts,Competitive pressure has had negative impact on Toy Stores look for significant store closings in many of these channels in 2009,Source:Trade Dimensions&TDLinx,services of The Nielsen Company,*Counts reflect chains not independents,Toys R Us adding expanded consumables section in 260 of 600 storesSource:USA TODAY,Page 6,U.S.Retailing&Consumer Trends,Walmart&Target Leading Store Expansion versus Major Grocers,*Includes Division 1,Supercenters,Neighborhood Markets&Sams Club,U.S.Store counts,Closing 50 poor performers in early 2009,Due to economic slowdown,Target&Walmart to cut back expansion in 2009&2010,Source:Trade Dimensions&TDLinx,services of The Nielsen Company,Target to aggressively expand food offering,Kroger opens 83rd Fresh Fare format,3rd under Kroger banner,Page 7,U.S.Retailing&Consumer Trends,Walmart Sales Almost as Large as Next Four Competitors,Source:Progressive Grocer May 2009,$152.8,$146.3,Page 8,U.S.Retailing&Consumer Trends,2nd Tier of Top Grocery Chains$58 Billion$2 Billion Less Than Kroger,Source:Progressive Grocer May 2009,Page 9,U.S.Retailing&Consumer Trends,Some Big Players Going w/Smaller Formats,Source:Company websites,Reuters,Orange County Register,Page 10,U.S.Retailing&Consumer Trends,Neighborhood Market by Walmart-Still in Expansion Plans,Page 10,Page 11,U.S.Retailing&Consumer Trends,Page 11,Focus on Freshness&Prepared Meals,Page 12,U.S.Retailing&Consumer Trends,Topic of Presentation,Page 12,Page 13,U.S.Retailing&Consumer Trends,Topic of Presentation,Page 13,Page 14,U.S.Retailing&Consumer Trends,Topic of Presentation,Page 14,Page 15,U.S.Retailing&Consumer Trends,Walmart Plans Growth in 15 Opportunity Markets,Eduardo Castro-Wright,president and chief executive officer of the U.S.division Wal-Mart Stores:“We call them opportunity markets because they are markets where we have a 3.9%share as opposed to our average of 8.9%,”he explained.“Those 15 markets represent 34%of total U.S.retail sales nearly the size of the entire retail market in China and larger than Russia and India markets combined.”Some of the chains ability to grow in those markets will come from the smaller“high efficiency”retail formats Wal-Mart is developing,he pointed out,“that would deliver much high sales per square foot and return on invested capital.”,Source:Supermarket News,Page 16,U.S.Retailing&Consumer Trends,Aggressively Promoting“Unbeatable Prices”Billboard Located 2 Blocks From Target HQ?,Page 17,U.S.Retailing&Consumer Trends,Aggressively Promoting“Unbeatable Prices”Billboard Located 2 Blocks From Target HQ?,While we question the authenticity of this photo,Walmart continues to be very focused on value&low prices.In a 7/1/09 full page ad in the Cincinnati Enquirer,Walmart made the following claims:“No one beats our Unbeatable prices.”“We will match any local competitors ads.”,Page 18,U.S.Retailing&Consumer Trends,Source:Cincinnati Enquirer,Investing in New Formats,Page 19,U.S.Retailing&Consumer Trends,Great Example of a Retailer Marketing Value w/Frequent Shopper Cards,Source:Winn-Dixie website,Page 20,U.S.Retailing&Consumer Trends,“Its So Easy!With the 1-2-3 REWARDS MasterCard,youll earn:1 point per$1 spent anywhere MasterCard is accepted 2 points per$1 spent in our stores(excluding fuel centers)3 points per$1 spent on the Kroger family of quality brandsEvery 1,000 points=$5 in free groceries!Plus,save up to 15 per gallon*with a bonus fuel discount at participating stores*!Rewarding Free groceries for every 1,000 points!Easy Automatic reward certificates sent every three months for earned rewards Smart No annual fee Safe Zero fraud liability Accepted Worldwide MasterCard acceptance for extra purchasing power when you need it”,Kroger Providing Shopper Incentives to Earn Free Groceries&Gas Discounts,Source:Kroger website,Page 21,U.S.Retailing&Consumer Trends,Coupons Back in Vogue,2.6 Billion,4.6 Billion,Source:Inmar CMS Promotions Services;excludes retailer coupons,Page 22,U.S.Retailing&Consumer Trends,Increased Coupon Activity,Source:Inmar CMS Promotions Services;excludes retailer coupons,Page 23,U.S.Retailing&Consumer Trends,E-mailed Coupon Offers,Source:Company websites,“access and save exclusive coupons from your phone or PC directly to your savings card!”,Page 24,U.S.Retailing&Consumer Trends,Digital Coupon Offers From Safeway,Source:Company website,Page 25,U.S.Retailing&Consumer Trends,Cooking Videos Linked to Shopping Lists&Feature Activity,Tips&Recipes to Save Money,Source:Company websites,Page 26,U.S.Retailing&Consumer Trends,Niche Grocery Store Count Growth From Natural/Gourmet&Deep Discounters,U.S.Store counts,Source:Trade Dimensions&TDLinx,services of The Nielsen Company,Aldi looking to add 75 stores in 2009;2008 sales grew 21%Source:The Wall Street Journal,Page 27,U.S.Retailing&Consumer Trends,Aldi Delivers Extreme Value For The Home,Interesting tag line in these economic times,Rolling out new Fit&Active Private Label brand featuring“Fit Facts”on product labelsSource:Supermarket News,Page 28,U.S.Retailing&Consumer Trends,Save-A-Lot providing meal solutions for less than the price of a gallon of gas!20 meal plans under$4.00 for a family of four,Source:Save-A-Lot website,Page 29,U.S.Retailing&Consumer Trends,Save-A-Lot providing meal solutions for less than the price of a gallon of gas!20 30 meal plans under$4.00$5.00 for a family of four,Source:Save-A-Lot website,In These Tough Times,Flexibility is Key,Page 30,U.S.Retailing&Consumer Trends,Meal Deals are Everywhere Next Generation of Recipe Marketing,Source:Company websites,Page 31,U.S.Retailing&Consumer Trends,Source:Company website,Page 32,U.S.Retailing&Consumer Trends,Fresh From Our Kitchen to Your Oven Oven-Ready Entrees,Side Dishes&Desserts,Source:Company website and Progressive Grocer magazine,Page 33,U.S.Retailing&Consumer Trends,Jewel-Osco Driving Value in Their Perimeter&Throughout the Store,Source:Jewel-Osco flyer,Page 34,U.S.Retailing&Consumer Trends,Manufacturers:Pitching“Value”&Increasing Ad Spending,Search-engine optimization when consumers type“cereal”plus“deals”or“value”,Kelloggs Web site will pop up,The original dollar menu campaign.10 cans soup for$10Jointly promoting with Kraft:soup&grilled-cheese sandwiches,Local word-of-mouth campaign“So good for so little”First time in more than a decade,advertising Banquet frozen dinners,15-second TV commercial for Kool-Aid showing how four pitchers of Kool-Aid cost same as a two-liter bottle of soda,Planning increase in ad spending&expanding number of brands it advertises,including Dinty Moore stews,Announced plans to increase consumer marketing 8%to 12%in its new fiscal year as part of a two-year growth plan,“Nestl Helps Makes Family Night Easy.”Free ice cream&DVD rental w/$15 purchase of select Nestl brands,Multimillion dollar campaign Using online&targeting individuals to a narrower focus of consumers,Source:Company Websites&Ads,Page 35,U.S.Retailing&Consumer Trends,Manufacturers:Positioning,Cause Marketing&Special Offers,“Best night cream,best eye treatment,hydrates better than even the$350 cream!Now save$5”,Source:Company Websites&Ads,“The Beauty Secret is Out 70%of salon-brand users agreetheir brand didnt beat Pantene”,“working to make this world a cleaner,healthier,better placetoday,for the next generation and beyond.”,Web site with consumer tips&on-line coupon&other promotional offers,Page 36,U.S.Retailing&Consumer Trends,Rapid Store Growth From Leading Drug Chains;Warehouse Stores Growing too,Decreasing openings from 495,425&365 over the next three fiscal years,U.S.Store counts,Source:Trade Dimensions&TDLinx,services of The Nielsen Company,Opening 6 to 8 stores in 2009,6,527,Page 37,U.S.Retailing&Consumer Trends,The Warehouse Club Treasure Hunt,Page 37,Page 38,U.S.Retailing&Consumer Trends,Significant Online Business From Club Retailers,“Savings of up to 30%*off supermarket prices”,Source:Company websites,Page 39,U.S.Retailing&Consumer Trends,Sams Club Focus on Small Business&Trial Programs to Build Membership,Source:Company website,Source:Company website,Page 40,U.S.Retailing&Consumer Trends,Page 40,Coupon Savings,Trial Programs,Sampling&Club Cards All Part of the Experience,Page 41,U.S.Retailing&Consumer Trends,Kraft&Sams Club Collaborate on“two week dinner plan”,Source:www.SamsC,Page 42,U.S.Retailing&Consumer Trends,Merchandising Wide Variety of Categories,Source:Company websites,Page 43,U.S.Retailing&Consumer Trends,Walgreens Helping Shoppers in Many Ways,Source:Company website&newsletter,Page 44,U.S.Retailing&Consumer Trends,Walgreens Caf W Back to The Future,Page 45,U.S.Retailing&Consumer Trends,Walgreens Caf W Back to The Future,“Walgreens will sell a limited selection of beer and wine at 70 percent of its 6,857 drugstores.Stores nationwide are being redesigned by department in an effort to make them easier to shop will introduce more private-label merchandise,ranging from paper towels to over-the-counter medications.”Source:Associated Press,Page 46,U.S.Retailing&Consumer Trends,Convenience/Gas-Current Industry Landscape,Still huge and fragmented,but consolidation startingSingle-store owners contracting Foodservice rising to replace lost cigarette revenueIndustry counting on Foodservice to drive 2009 sales,Page 47,U.S.Retailing&Consumer Trends,Top Ten Convenience Store Chains Dominated by Petroleum Companies&Franchise Operators,Source:Convenience Store News Hot top 100 August 2008,62%of top 100 stores from top 10 off 61 units as oil companies divest or franchise retail operations,Page 48,U.S.Retailing&Consumer Trends,2nd Tier of Convenience Store Chains Dominated by Company-Owned Operators,Source:Convenience Store News Hot top 100 August 2008,Page 49,U.S.Retailing&Consumer Trends,3rd Tier of Convenience Store Chains Dominated by Company-Owned Operators Too,Source:Convenience Store News Hot top 100 August 2008,Page 50,U.S.Retailing&Consumer Trends,Source:Convenience Store News/Nielsen TDLinx,144,875,61.8%,146,294,62.0%,145,119,38.0%,62.0%,38.2%,38.0%,Chain,Single Store,200820072006,Single-Store C-Store Operators Drive 1%Decline in Store Count,but Still the Majority,Page 51,U.S.Retailing&Consumer Trends,Giant To Go a Convenience Store or Small Grocery Store?,Source:Supermarket News and Convenience Store News,Page 52,U.S.Retailing&Consumer Trends,Source:Public Domain(store interior),company website(small images),Gary M.Baranec/Associated Press(touch screen),A Fun Place to Go for Food Shoppers Use Touch Screens to Place Orders,Page 53,U.S.Retailing&Consumer Trends,Source:Company website,WaWa Drives Strong Food Service Business with Touch Screen Order Process too,Page 54,U.S.Retailing&Consumer Trends,Source:Company website,One of Five Convenient Store Divisions from Kroger,Page 55,U.S.Retailing&Consumer Trends,7-Eleven Offering Meal Deals Too,Source:Company website,Page 56,U.S.Retailing&Consumer Trends,BP Franchises Food Service Focus in Channel Has Never Been Stronger,Source:Company website,Page 57,U.S.Retailing&Consumer Trends,*Includes Division 1,Supercenters,Neighborhood Markets&Sams Club,Rapid Store Expansion Within Dollar Channel,1,025 new Walmart Corp stores since 2001,but 8,291 new Dollar Stores from these 5 chains,U.S.Store counts,Source:Trade Dimensions&TDLinx,services of The Nielsen Company,8,436,Source:Supermarket News,Page 58,U.S.Retailing&Consumer Trends,*Includes Division 1,Supercenters,Neighborhood Markets&Sams Club,Rapid Store Expansion Within Dollar Channel,1,025 new Walmart Corp stores since 2001,but 8,291 new Dollar Stores from these 5 chains,U.S.Store counts,Source:Trade Dimensions&TDLinx,services of The Nielsen Company,8,436,Planning to open 450 new stores;up from 207 this past FY;remodeling or relocating 400 other stores,Source:Supermarket News,Page 59,U.S.Retailing&Consumer Trends,Dollar Stores Increasing Branded Focus;Expanding Price Points&Promotions,Source:Company websites,Page 60,U.S.Retailing&Consumer Trends,Strong Focus on Pets,Source:Company website,Page 61,U.S.Retailing&Consumer Trends,Strong Focus on Pets,“Me-Too”Store Brands,Source:Company website,Page 62,U.S.Retailing&Consumer Trends,Strong Focus on Pets,“Me-Too”Store Brands&Easy Meals,Source:Company website,Page 63,U.S.Retailing&Consumer Trends,Shakeup of The Retail LandscapeAnnounced Store Closings,Rite-Aid 117(on top of 200 in prior fiscal)SuperValu 50 Sears Holding 24Brunos 10Penn Traffic 8Sweetbay 7Sams Club(Canada)6 Bashas 15Balduccis 5A&P SuperFresh 5Lane Bryant/Catherines 150Sprint 133 stores FYE 130Office Depot 112 storesZales 105Macys 10,Starbucks closing nearly 1,000 underperforming stores worldwide in less than 2 years Circuit City closing all 567 stores,Linens n Things closing all 571 stores&shifting to online model,Page 64,U.S.Retailing&Consumer Trends,Shakeup of The Retail LandscapeAnnounced Store Closings,Rite-Aid 117(on top of 200 in prior fiscal)SuperValu 50 Sears Holding 24Brunos 10Penn Traffic 8Sweetbay 7Sams Club(Canada)6 Bashas 15Balduccis 5A&P SuperFresh 5Lane Bryant/Catherines 150Sprint 133 stores FYE 130Office Depot 112 storesZales 105Macys 10,Starbucks closing nearly 1,000 underperforming stores worldwide in less than 2 years Circuit City closing all 567 stores,Linens n Things closing all 571 stores&shifting to online model,NEW YORK(Reuters)General Growth Properties Inc,the second largest U.S.mall owner,filed for bankruptcy protection on Thursday in one of the biggest real estate failures in U.S.history.Ending months of speculation,the Chicago-based mall owner,which listed total assets of$29.56 billion and total debts of$27.29 billion,sought Chapter 11 bankruptcy protection from creditors along with 158 of its more than 200 U.S.malls,while it seeks to restructure some of its debt.04/16/2009,Page 65,U.S.Retailing&Consumer Trends,Rate of Restaurant Openings Decreasing&Eclipsed by Closings,Source:Trade Dimensions thru April 2009,Page 66,U.S.Retailing&Consumer Trends,Dining:That was then.,Source:Company Reports-NRN(Dec 22,2008),2007,20 of 32 operators reported same store gains;Overall avg:+1%,Page 67,U.S.Retailing&Consumer Trends,Dining:This is now!,Source:Company Reports-NRN(May 11,2009),2008,30 of 32 operators reported same store losses Overall avg:-8.2%,Guest CheckCustomer Traffic,Page 68,U.S.Retailing&Consumer Trends,Store Closings How Will They Impact Your Bu