I hope you're having a great start to your Summer!
Here is your round-up of the key stories from across the FMCG industry...
Inflation accelerates
Grocery inflation hits another all time high, as like-for-like prices grow 8.3% in the latest Kantar period.
Experts predict that inflation will get worse, rising as high as 20% by early 2023.
As the cost of living continues to rise, brands and retailers need to find more engaging ways to help people save money.
Aldi and Lidl continue to gain share as Tesco grow ahead of the market, increasing their share to 27.3%.
Own Label's time to shine...
As shoppers manage their grocery spend, they begin to switch branded items for retailer own label equivalents. This has resulted in a -1% decline of branded sales and +2.9% growth of own label.
Brands suffer a double-digit decline in several parts of the store including pasta, hot drinks, and non-food categories like household cleaning products.
There are also categories where shoppers will continue to prioritise quality and brands will continue to grow. For example, branded sales of fizzy drinks are up 6.6% while branded crisps and snacks are up 6.8%.
We are seeing retailers increase their levels of communication about own label.
The most extreme is Morrisons, who are encouraging shoppers to trade down with in-store POS and online banners.
Whilst they are helping shoppers spend less, it's certainly not a triple win for the category. It's bound to cause friction with suppliers and result in lower sales overall.
The different price tiers within own label will play an increasingly important role. We already see the "value" ranges outgrow the other price tiers at +12%.
Asda have invested over £90 million to expand their new value range, 'Just Essentials'.
By the end of the year, this new range will include 293 products, a 50% increase compared with their old 'Smart Price' range.
What do you think? Will you be buying more retailer own label as a way to save money?
As shoppers look for ways to save money, it will be a challenging time for many brands.
If there is anything we can do to help you or your business - get in touch!
Stay safe, well and positive.
Ella.
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