Nutri-Score Pressures Food Makers To Improve

Research by economists into the composition of ultra-processed products in France, the UK and Italy has revealed that recipes in France have improved over time. With France being the only country of these three that has implemented the Nutri-score, the researchers conclude that manufacturers have modified their recipes to raise their score. From the introduction of the label, retailers had already understood the benefit of Nutri-score to promote their own brands, making sure that the products contained less sugar, less salt, and less saturated fatty acids, thus achieving a higher score. Apparently, in a context of heightened competition between national brands and private label, Manufacturers’ brands are starting to modify their recipes, too. It is said that one in three French people considers the Nutri-score to be decisive when choosing a product.

Self-Checkout a Hit In The Nordics

A study by Swedish Uppsala University and software developer ID24 among over 100 retail chains in the Nordics shows that the grocery sector is one of the leaders in the use of self-checkout systems. Many retailers are integrating mobile app scanning.

Some 62% of retailers operating in the food sector use self-checkout systems. Most retailers use self-checkout for reasons of a faster process for consumers as well as a means of reducing staffing costs. Interestingly, overall, retailers did not perceive a positive association between self-checkout adoption and generating higher sales.

Undoubtedly, the greatest challenge associated with deploying self-checkout systems emerging from the survey is theft, which was indicated by 89% of respondents, of whom 29% noted theft as being an extreme challenge.

Despite the challenges associated with the adoption of the mobile app feature, grocers remain committed to further investing into their mobile app technology due to the steady increase in customer usage.

One in Four Germans Buys Household Staples Online

Last year, 23% of Germans aged 16 to 74 years old said they had bought products like food, detergents, or cosmetics online in the last three months. Online purchases have become particularly popular in the 65 to 74 age group. Here, the proportion of those who shopped online rose from nearly 55 percent in 2021 to almost 62 percent two years later.

 

Customers Are Eschewing Ultra-Processed Foods

A survey by trade magazine The Grocer of 1,000 adults shows a great leap in the importance of health. No less than three million consumers in the UK have started avoiding ultra-processed foods (UPFs) in the past three months.

Research from the EIT Food Consumer Observatory, combining a survey of 10,000 consumers from 17 European countries found that 65% of European consumers believe that ultra-processed foods are unhealthy, and that they will cause health issues later in life.

More than two-thirds of consumers (67%), for example, believe UPFs contribute to obesity, diabetes, and other lifestyle-related health issues.

Furthermore, 67% of European consumers state that they do not like it when their foods contain ingredients they do not recognize, and four in 10 (40%) do not trust that ultra-processed foods are regulated well enough by authorities to ensure these foods are safe and healthy in the long term.

UPFs include packaged snacks, soda, sugary cereals, energy drinks and chocolate bars, as well as foods such as ready-made sauces and dips, ready meals, and salad dressings.

Despite consumers’ health concerns, 56% admit to eating UPFs at least once a week, citing convenience, price, and taste as motivations.

Private Label in US Produced Record-Setting Sales

In 2023, own brands continued to be the brightest light in US grocery food and nonfood. 

Unit sales were nominally even, off by only 0.1%, compared to national brands which shed 2.8%. Own brand unit share came in at 20.7%, an improvement of 0.5 points from 2022 and setting a record. Dollar sales rose by 4.7%, compared to a gain of 3.4% for national brands. Own brand dollar share moved up to 18.9%, ahead 0.2 points from 2022, likewise a new high. 

In arguably the most important metric, annual private label dollar sales moved ahead to $236.3 billion, an increase of $10.1 billion from the previous year and establishing another all-time mark.

Private label in the US is on a four-year winning streak. Compared to 2019, annual dollar sales in 2023 increased by $60.2 billion, a gain of 34%. Own brand dollar share rose 1.2 points to a record 18.9%. During the same period, Private label unit sales were ahead by 500 million and unit share improved 0.8 points to 20.7%, also a new high,

The data comes from PLMA's just-released 2024 US Private Label Report, now available here.

AI Seen as Inevitable for Retailing

AI is the central digitalisation trend in the industry, according to an EHI survey among German retail marketing managers. 82.4 of respondents see AI as an important marketing trend which has the greatest potential in marketing.  

AI is already used in personalizing communication with customers, for example through chatbots that respond to individual wishes. In addition to creating texts and images, artificial intelligence can also analyze and link customer data. As a result, 
the programmes offer increasingly better opportunities to analyze and predict customer purchasing behavior in order to optimize sales. With over half of respondents say that marketing is moving increasingly towards customer centricity, tools to help focus on individuals become all the more important.

Finally, more than a third of the retail managers feel that AI could change jobs or create new ones, although that would require (new) employees familiar with generative AI.

Gen Z Wants Self-Scanning, Self-Checkout, Checkout-Free

A study among 4,000 shoppers in the UK and the US, commissioned by Avery Dennison, found that 52 percent of Gen Z would “switch to another store if their favorite decided to get rid of self-checkout.”

Two-thirds (67%) of those polled would opt for retailers that offer self-scanning at the end of a shop, while almost three-in-five (59%) stated the same about self-scanning as they shop.

Furthermore, 49% would be likely to spend more money with a retailer that has a connected or automated checkout experience, and 52% say connected stores would make them more loyal to a retail brand.

Nine of ten polled have experienced some form of frictionless shopping in the last year including self-scanning, self-checkout, full check-out free stores and try at home before you purchase services.
 

Data Shows Shoppers Shifting Away From Traditional Grocers

New findings from 210 Analytics and Circana revealed traditional supermarkets have lost favor over the past four years as competitors like club stores and mass merchants have grabbed market share.

This change has occurred as consumers have gravitated to value-focused merchants, visited more retailers, and switched stores in response to inflation, according to analyses of the data by 210 Analytics. This shift is also apparent across a range of key grocery categories, the company found.

For instance, traditional supermarkets accounted for 39.8% of meat sales in 2023, compared with 23.3% for mass retailers and supercenters, and 12.4% for club retailers. In the refrigerated seafood department, traditional grocers had 36.8% of sales last year, while mass retailers and supercenters accounted for 6.4% and 21.2% for club retailers. according to 210 Analytics and Circana.

While traditional supermarkets still command larger shares of those categories, retail competitors are gaining ground. The erosion has been ongoing since 2019 and it is especially pronounced in the meat and refrigerated seafood departments according to the data. 

Supermarkets shed about three percentage points of share in both those categories between 2019 and 2023, while mass retailers and supercenters saw their portions of the categories increase by more than two percentage points over the same time period.

Market share has also been lost by traditional grocery stores in the bakery, deli and produce categories over the past four years as mass retailers, supercenters and club retailers either drew a larger proportion of the market or sales remained steady in those categories.

IBM Report Sees Interest in AI-Driven Shopping

A global study from the IBM Institute for Business Value reveals a widening gap between shopper demands and the current retail offerings and a growing interest in AI shopping.

The study named “Revolutionize retail with AI everywhere: Customers won't wait,” found three key issues for retailers when it came to shopping. First, despite a preference for physical stores by 73% of those surveyed, only 9% are satisfied with the in-store experience. Consumers surveyed want a greater variety of products available (37%), more information about products (26%), and faster checkout (26%) in stores.

Most consumers surveyed (65%) are supplementing their in-store experience by using mobile apps while shopping -- demonstrating a trend toward a digitally integrated in-store experience.

Online retail also was not immune to criticism. Two-thirds of consumers surveyed discover new products via the web, but they expressed dissatisfaction with their online shopping experience. Challenges finding the products they want (36%), not enough information about products (33%), and a cumbersome return process (33%) were their key issues.

One interesting finding was about consumers and AI technology. Consumers surveyed showed a strong interest in using AI technology to enhance various aspects of their shopping. Most consumers (59%) said they would like to use AI applications as they shop and 4 in 5 consumers who have not used the technology reported an interest in trying it.

As of now, consumers seem underwhelmed by AI as the report showed less consumer satisfaction in using current AI assistants. Only about one-third of the respondents who used a virtual assistant were satisfied with the experience. Nearly 20 percent were so disappointed that they didn't want to use AI virtual assistants again.

Despite this, IBM believes AI technology is still in its infancy and investment by retailers into improving the system could provide great benefits.

“Leveraging advances in AI technologies, retailers can forge ahead into a new era of commerce and fulfilment, leading with innovation to create shopping experiences that are intuitive, unified, personalized and efficient," Luq Niazi, the Global Managing Director at IBM said about the findings.
 

Half of Portuguese Only Buy Sale Products

A study by Kantar shows that 51.3% of Portuguese consumers’ purchasing occasions include products on sale. 77% of respondents say they compare prices and choose the cheapest brands. Overall, last year, purchases of fmcg increased by 8.1% in value and decreased by 4.4% in volume compared to the previous year.

While over the year, the Portuguese increased the frequency with which they go shopping and decrease the volume purchase each time, both trends slowed down compared to the previous year.

Private label continues to gain relevance in Portuguese households, with a growth of seven percentage points in value share between 2020 and 2023. Private label purchase frequency increased by 4.4% between 2022 and 2023, with a significant increase of 19.4% in the amount spent by consumers on these brands.