Trends That Will Shape 2016
As we begin 2016, supermarket retailers and suppliers continue to adjust to changing consumer needs and demands affecting their businesses.
While we have no crystal ball that can predict the future, some of the major trends for the New Year that will shape the grocery shopping landscape are:
- The current trend for healthier living and more nutritious eating will expand in 2016, and supermarkets will continue to be “wellness advocates”.
- In a recent a study by Nielsen, health care categories outpaced in units and dollars the grocery category by three fold. The leading sub-categories were vitamins and supplements, home remedies, and nutrition bars, all of which showed double digit growth.
- Millennial shoppers whose focus on products that are natural, organic, non-GMO and friendly to the environment will continue to gain momentum. To meet the non-foods needs of Millennials, we will see increased sales in natural skin care and body products, cosmetics, natural vitamins and minerals. Houseware products that enhance hydration, and are free of PVG and APA in categories such as pet, baby, toys, storage containers and kitchen/baking goods will also grow in sales. Once the exclusive domain of natural food stores, many of these items are now becoming main stream.
- Private label and store brand products will continue to grow in popularity in the New Year. According to a recent survey by Package Facts, private label is projected to grow 62% to $133 billion in 2016. It is also projected to outpace national brand counterparts due to increased consumer acceptance and value. In non-foods HBW category, medications and remedies, vitamins, and cough and cold products are the top private label sellers.
- The diversity of the supermarket shoppers will continue to expand creating a “multicultural buying power”. Nielsen projects that the share of United States buying power in 2020 from the Hispanic and Asian populations will be 17% of a $4.2 trillion market. This dramatic influence requires the right mix of products to meet the needs of a changing customer demographic.
- Another shopper segment that is growing and will have a powerful influence on the grocery landscape in 2016 is the aging population. A recent study showed that by 2020, 1 in 5 adults (21%) will be age 65 or older. Between now and 2030, 10,000 baby boomers will turn 65 every single day. As the population ages and people live longer, non-foods will see increased sales of internal and external analgesics, vitamins and supplements, stomach remedies, cough/cold and allergy items as well as incontinent products.
- The increased use of social media and digital technology to connect and communicate with shoppers will continue to be an even greater factor in 2016. “Digitizing the Supermarket” is still in its infancy, but the challenge for supermarkets and suppliers in the coming New Year will be to provide media messaging which will make the shopping experience easier, faster, and more efficient.
- Online and mobile shopping with home delivery will continue to expand in 2016 to meet the needs of the “time starved” consumer. It is expected that by 2020, 93% of Americans will have shopped online. In the coming New Year, more supermarkets will take advantage of “click and collect” programs in order to make grocery shopping easier and less time-consuming.
- The consolidation in the supermarket industry will continue in 2016. While the big continue to get bigger, there is still an important place for the independent grocer who can offer great customer service, quality, niche categories, convenience and value.
- Competition in the marketplace will accelerate in the New Year with the growth of new and different store formats selling grocery and non-foods. “Channel blurring” and multi-channel shopping will continue, and the challenge will be how retailers find their points of differentiation.
- The outlook for non-foods in supermarkets in 2016 looks very good as shown by a recent Nielsen study predicting increased sales for the New Year for HBW up 2.8%, pet care up 3.6%, and non-food grocery up 1.4%
The forecast for the economy also looks positive, and retailers and supplies will adapt and innovate to the changing landscape. Change seems to become the new normal. So, as we begin the New Year, we wish everyone a very healthy, joyous and prosperous 2016.