Trends for a new year

It’s a new year, and with it comes the opportunity for a fresh start for retailers. While no one can tell exactly what 2010 will bring, most experts agree that consumers’ new-found frugality is likely to linger—either out of choice or necessity.

“Nielsen research reveals that consumers’ fundamental spending adjustments are likely to last in the next year,” said Todd Hale, senior VP consumer and shopper insights, The Nielsen Co., and author of the firm’s “Top Five Consumer Goods Trends in 2010” study. “Almost one-third of consumers (30%) say that they will use credit less even when conditions improve, with 19% saying that they intend to save more money.”

Indeed, restraint remains the new normal, according to Nielsen, as unemployment, the need to save money and other economic issues continue to be top of mind for consumers. One revealing factor: Coupon use is up among consumers.

As for the other top trends to watch for, here is how they shape up, according to Nielsen:

• Value is a top priority. With no signs of readiness to open wallets, a focus on low prices at the expense of all other variables threatens margins, Hale noted. Value messaging must also include some point of differentiation beyond pricing. Most likely to be the big winners: manufacturers and retailers that “drive the recession wave” and take an active role in innovation and ad spending.

• Store-brand growth continues. Even with year-end 2009 softness in store-brand, dollar-share growth as retailers cut prices across the store to be more competitive, unit-share growth continues, and retailer focus has never been stronger.

• Grocery consolidation intensifies. Local and regional players, unable to drive profits in the soft economy, will become acquisition targets, and some larger national and regional grocers will divest unprofitable formats and banners to strengthen investments behind their winning formats and banners.

• Assortment wars escalate. Retailer efforts to simplify the consumer shopping experience by eliminating aisle and shelf clutter will cause market share land grabs for small- and medium-sized brands in pursuit of elusive revenue growth. Retailers may lose sales as they shift away from in-store merchandising that drove impulse buying and built shopper baskets, according to Hale.

Look for brands caught in the trap of greater store-brand focus and assortment optimization to forge alliances with key retailers, enter or step-up efforts as store brand suppliers, and/or explore direct-to-consumer sales.

The new year also brings with it some changes to Chain Store Age. In addition to a more modern, streamlined look, we’ve incorporated a few new features, including rotating guest columnists who will offer industry insights.