REDEFINING RETAIL FACTORS INFLUENCING CPG GROWTH WITHIN HEALTH & BEAUTY Q2 2014

Transcription

1 REDEFINING RETAIL FACTORS INFLUENCING CPG GROWTH WITHIN HEALTH & BEAUTY Q2 2014

2 THE CHALLENGE FOR GROWTH 2 Copyright 2013 The Nielsen Company. Confidential and proprietary.

3 CPG STILL SPUTTERING FOR GROWTH IN NORTH AMERICA United States Canada Dollars Units Nielsen: ScanTrack Total Tracked Sale 52 wks ending July 5, 2014 Dollars Units Nielsen: MarketTrack Total Tracked Sale 52 wks ending June 28,

4 2014 IS SHAPING UP TO BE MORE OF THE SAME Slow growth, driven only by inflation $ % Chg Unit % Chg YTD 2014 Inflation Source: Nielsen MarketTrack, National All Channels YTD 28 weeks to June 28, 2014 Total Tracked Sales excluding Fresh Random Weight 4

5 THE PRAIRIES LEAD REGIONAL PERFORMANCE The Prairies lead regional growth twice the National average 52 week Regional CPG Performance $ % Chg Unit % Chg National Maritimes Quebec Ontario Prairies B.C. Source: Nielsen MarketTrack, National All Channels 52 weeks Ending June Total Tracked Sales excluding Fresh Random Weight 5

6 WESTERN CANADA HAS NOW SURPASSED THE EAST AS YOUNGER CANADIANS MIGRATE FOR JOBS East Ontario West 30.6% 38.4% 30.7% Older Deal sensitive Less Store Brands Immigration Discount Urbanization Source: Statistics Canada The Canadian Population in 2011 Analytical document East: Atlantic + Quebec West: Prairies + BC Jobs Migration Fertility Immigration 6

7 CONVENIENCE & GAS OUTPACING THE MARKET Convenience & Gas (+3%)* Drug (+2%) 6% 12% All Other (+2%) Total Market: $73.3 Billion (+2%) 11% 71% Copyright 2013 The Nielsen Company. Confidential and proprietary. Source: Nielsen MarketTrack, National, Dollars, 52 weeks ending June 28, 2014 Excludes Fresh Random Weight and Food Service; * Includes Tobacco Grocery & Mass (+1%) 7

8 HEALTH & BEAUTY SALES ARE OUTPERFORMING TOTAL CPG $ Share and Growth Non Grocery HABA Grocery Categories All Channels Source: Nielsen MarketTrack, 52 Weeks to June 28, 2014 Excludes Random Weight Fresh Grocery + Mass Drug Stores

9 HABA CATEGORIES ARE LEADING RETAIL SALES GROWTH WITHIN GROCERY + MASS MERCHANDISERS $ Share and Growth Non Grocery HABA Grocery Categories All Channels Source: Nielsen MarketTrack, 52 Weeks to June 28, 2014 Excludes Random Weight Fresh Grocery + Mass Drug Stores

10 FOOD CATEGORIES ACCOUNT FOR ALMOST 1 IN 5 DOLLARS SALES IN DRUG STORES FUELING GROWTH $ Share and Growth Non Grocery HABA Grocery Categories All Channels Source: Nielsen MarketTrack, 52 Weeks to June 28, 2014 Excludes Random Weight Fresh Grocery + Mass Drug Stores

11 SDM TESTING FRESH FORMAT Source: Nielsen photos 11

12 HOW ARE THE HEALTH & BEAUTY DIVISIONS PERFORMING? OTC $12.4 Billion 18% of CPG Body Care Baby Care Cosmetics % Source: Nielsen MarketTrack, National All Channels 52 weeks Ending June Hair Care Oral Hygiene Shaving

13 MAKING THE CUT IN HABA Top 5 Face Care +2% Headache Rem 3% Shampoo+Cond. +0% Health Suppl. +5% Diapers +0% Men s Antifungals +17% Sleeping Aids +13% Topical Analgesics +13% Energy Nutrition +11% Athletic Supports +10% Source: Nielsen MarketTrack, National All Channels 52 weeks Ending June > $5 million Enemas 13% Tooth Polish 12% Acne Products 8% Menstrual Relief 8% Wart Removers 6% 13

14 DRUG STORES REMAIN THE TOP DESTINATION FOR HABA SALES BUT LOSING SHARE $ Share Pt Chg Drug Stores 39.6% 36.3% 3.4 Grocery 23.4% 22.9% 0.5 Mass Merch. 21.4% 21.4% +0.0 Warehouse 7.0% 9.6% +2.6 Source: Nielsen Homescan Channel Facts 52 Weeks Ending June 28, 2014 Health Food 1.9% 2.1% +0.2 Remaining 6.7% 7.7%

15 WHERE IS THE CONSUMER TODAY? Do you think economics conditions are better today than a year ago? YES NO 15

16 WHERE IS THE CONSUMER TODAY? As a result, will you change your spending behaviours? YES NO 16

17 WHERE DO WE FIND GROWTH IN A CHALLENGING ENVIRONMENT? 17

18 TRENDS IMPACTING GROWTH Cyclical Changes Economy still fragile Cautious Consumer Structural Changes Value Motivators Emerging Retail Formats Connected Consumer Evolving Consumer 18

19 CONSUMER SENTIMENT IN A HOLDING PATTERN 19 Copyright 2013 The Nielsen Company. Confidential and proprietary.

20 CANADIAN CONSUMER CONFIDENCE IS IN A HOLDING PATTERN SINCE THE RECESSION Q05 3Q06 3Q07 3Q08 2Q09 2Q10 4Q11 4Q12 4Q13 2Q14 Pre Recession Recession Post recession Source: Nielsen Global Online Consumer Confidence Surveys Q

21 TOP CONCERNS 2014 is presenting may new consumer pressure points 1) Economy 2) Debt 3) Jobs 1) Health 2) Debt 3) Food Prices 4) Health 5) Food Prices ) Utility Bills 5) Fuel Prices Source: Nielsen Global Omnibus Consumer Confidence Survey Q Canada Top 2 Combined

22 CONSUMERS ARE STILL FOCUSED ON SPENDING RESTRAINT 54% are trying to reduce household expenses $$$ 73% are trying to spend less on their grocery bill* 3% decline in household expenditures Source: Nielsen Homescan, Total Expenditures 52 Weeks Ending June 28, 2014 Q Global Omnibus Survey Canada * Nielsen Panel Views Survey June 2014 Canada 22

23 WHAT ARE CONSUMERS DOING TO SAVE? Top saving activities: Stock up when on promotion 85% New #1 Only buy items when on sale 75% Use Coupons 65% Seek out stores with lower prices 59% Buy larger sizes 52% Buy lower priced store brands 48% Buy lower priced name brands 38% Shop at Discount Retailers 36% Source: Nielsen PanelViews Survey Canada June 2014 $$$ 23

24 SINCE BEFORE THE RECESSION, % OF RETAIL SALES SOLD WITH A PRICE CUT HAS INCREASE 10 POINTS % Dollars Sold on TPR 27% 27% 31% 33% 34% 35% 37% 37% HABA 27% Source: Nielsen MarketTrack, National GB+MM+DG 12 week periods ending June 28, 2014 Quarterly Periods 24

25 HABA DEPARTMENTS ARE LESS DEPENDENT ON PRICE CUTS BUT IS GAINING MOMENTUM TPR* % of Total Dollar Sales $ % Chg TPR* Total ORAL HYGIENE BABY CARE BODY CARE HAIR CARE SHAVING OTC COSMETICS * TPR Temporary Price Reduction Source: Nielsen MarketTrack, National Grocery + Drug + Mass 52 weeks to June 28, 2014 versus Year Ago

26 ALMOST 6 BILLION IN GROCERY SALES HAVE SHIFTED TO DISCOUNT RETAILERS SINCE 2007 Yr 2007 Yr % 43.7% HABA 36% MORE TO COME Discount Share Projections: Discount $ Share +9 share points Source: Nielsen MarketTrack National GB+DG+MM 52 weeks to June 28, : 44.7% 2017: 50.9% 26

27 DISCOUNT RETAILERS GAINING SHARE OF WALLET FOR THE MAJORITY OF HABA DEPARTMENTS Discount Dollar Share $ % Chg Disc Conv BABY CARE SHAVING HAIR CARE ORAL HYGIENE BODY CARE OTC COSMETICS Source: Nielsen MarketTrack, National All Channels 52 weeks to June 28, 2014 * Excludes Random Weight Fresh

28 TRADITIONAL RETAIL UNDER ATTACK TRADITIONAL 28 Copyright 2013 The Nielsen Company. Confidential and proprietary.

29 THE LOYAL, DISLOYAL SHOPPER Average Loyalty to Store 14% Source: Nielsen Homescan: Top 10 Banners in Ontario Avg $ Share of Requirements 52 weeks to Sept 19/13 The Opportunity Need to understand what and where your shoppers are spending the other 86% 29

30 TRADITIONAL CPG CHANNELS RELATIVELY STATIC Grocery 1% Drug +2% Conv & Gas +3% Warehouse +3% Mass Merch 5% less Zellers +5% Source: Nielsen Homescan Channel Watch Canada 52 weeks to June 28, 2014 *Convenience Track 52 weeks to June 28, 2014 Drug MarketTrack 30

31 MANY RETAIL CHANNELS SUFFERING DUE TO THE SHIFT TO ONLINE AND INCREASED COMPETITION Grocery 1% Drug +2% Conv & Gas +3% Warehouse +3% Mass Merch 5% less Zellers +5% Source: Nielsen Homescan Channel Watch Canada 52 weeks to June 28, 2014 *Convenience Track 52 weeks to June 28, 2014 Drug MarketTrack Office Supply 23% Electronic 17% US Cross Border 16% Department 9% General Merch 4% 31

32 E COMMERCE, ETHNIC, HEALTH AND DOLLAR STORES LEAD RETAIL GROWTH IN CANADA Online +43% Ethnic Grocery +20% Health Food +8% Dollar Stores +7% Grocery 1% Drug +2% Conv & Gas +3% Warehouse +3% Mass Merch 5% less Zellers +5% Source: Nielsen Homescan Channel Watch Canada 52 weeks to June 28, 2014 *Convenience Track 52 weeks to June 28, 2014 Drug MarketTrack Office Supply 23% Electronic 17% US Cross Border 16% Department 9% General Merch 4% 32

33 HEALTH FOOD SPECIALTY STORES $523 Million 15% of households HEALTH Source Nielsen Homescan 52 weeks to June % buying HABA Spending $242 per year 5 trips per year 33

34 DOLLAR STORES HAVE ROOM TO GROW IN CANADA CANADA U.S DOLLAR STORES $ Share 1.2% 2.3% % Chg +7% +1% Penetration 75% 66% Source Nielsen Homescan 52 weeks to June % of Dollar Store shoppers buy HABA in Dollar Stores 34

35 ETHNIC STORES CONTINUE TO CAPTURE A LARGER SHARE OF CANADIAN WALLETS Ethnic Grocery +20% Source: Nielsen Homescan Retailer Watch Ethnic Stores, 52 weeks to June 28, 2014 Estimate $4 5 Billion* 17% of households :36% in Toronto Spending $328 per year 11 trips per year * Perry Caico CIBC World Markets 35

36 ONLINE SHOPPING GAINING MOMENTUM Online Shopping +43% 1.9% share of Tracked Sales Grocery Composite 0.6% Drug Composite 1.0% Copyright 2013 The Nielsen Company. Confidential and proprietary. +11% YA $2.3 Billion Source: Nielsen Homescan, National Total Expenditures, 52 Weeks Ending June 28, % of households (+22%) Spending $388 /yr (+17%) 36

37 WHAT ARE CONSUMERS BUYING ONLINE AND WILLING TO BUY ONLINE? Currently Buying Online Willing to Buy Online 21% Toys 16% Health & Beauty 14% Cosmetics 9% Paper Products 7% Household Products 7% Confectionery 6% Pet Products 6% Non Perishable Food 6% Baby Products 4% OTC Drugs 4% Beverages 3% Fresh Produce 3% Perishable Food Source: Canadian PanelViews Social Media Survey Oct % Paper Products 64% Household Products 56% Heath & Beauty 55% Toys 50% Non Perishable Food 49% Pet Products 48% Confectionery 48% Cosmetics 47% OTC Drugs 45% Beverages 33% Baby Products 20% Perishable Food 18% Fresh Produce 37

38 THE FACE OF THE CANADIAN SHOPPER IS CHANGING Ethnicity Downsizing Generations 38

39 COMMON GENERATIONAL DEFINITIONS While there are many generalizations, there is no official definition Millions <19 Gen Z 16% Source: Statistics Canada Census Gen Y 27% Gen X 14% Boomers 28% 68+ GI 14%

40 CURRENTLY MILLENNIALS ARE UNDER REPRESENTED IN PURCHASING POWER Millennials Importance 27% 14% 12% % of Population 9.1 M Source: Source Nielsen Homescan 52 weeks to March 29, 2014 % Household Heads 2.0 M % of CPG $ s 11.7 B 40

41 MILLENNIALS WILL SURPASS BOOMERS BY M 26% 10.0 M 26% 11.0 M 26% 9.7 M 28% 9.4 M 24% 8.3 M 20% Total Canada 34.2 M 38.4 M 42.1 M Source: Statistics Canada M: Millions Millennials Boomers 41

42 THE CPG GROWTH ENGINE WILL SWITCH GEARS By 2020 MILLENNIALS BOOMERS +$12.6 B $4.3 B +207% Source: Nielsen Homescan 52 weeks to March 29, 2014 HH <35 years Based on older generation spend 9% 42

43 WHICH HABA DEPARTMENTS ARE MOST COMMONLY FOUND IN A MILLENNIALS SHOPPING BASKET? Relative Dollar Index <35 years Baby Care 384 Body Care 122 Hair Care 120 Cosmetics 109 Oral Hygiene 97 OTC 67 Nielsen Homescan Dollar Consumption Index 52 wks to December 28, 2013 Consumer Facts CPG Departments Relative Index (82 for total) 43

44 AGING IN AND AGING OUT As consumers age, they change their consumption of key HABA departments HH Dollar Index yrs 65+ yrs Trend OTC Oral Hygiene Cosmetics Body Care Hair Care Baby Care Nielsen Homescan Dollar Consumption Index 52 wks to December 28, 2013 Consumer Facts CPG Departments 44

45 I want to watch what I want, when I want and for free. 45

46 MEDIA HABITS DIFFER BETWEEN GENERATIONS Boomers Millennial LIGHT Media Usage MEDIUM HEAVY TV Internet Magazines Newspaper Radio Source: Nielsen Spectra, PMB, January

47 OVER THE PAST 3 YEARS, MILLENNIALS ARE WATCHING LESS TRADITIONAL TELEVISION hrs/day Millennials 22hr 48min 22hr 29min 20hr 52min Boomers 33hr 36min Source: Nielsen Borealis; TV Data Source: BBM Canada 33hr 47min 33hr 59min 4.9 hrs/day 47

48 TOP 10 TV SERIES AMONG MILLENNIALS IN 2013 Boomers 1. Amazing Race Canada 1 2. Big Bang Theory 3 3. Masterchef Stanley Cup Finals 5 5. Sochi FEMALES: 7 of 10 are reality shows 6. La Voix 2 7. Agents of S.H.I.E.L.D Under the Dome 4 9. Amazing Race 9 10.Grey s Anatomy 22 Source: Nielsen Borealis; TV Data Source: BBM Canada TV Series Excluding specials MALES: 2of 10 are reality shows 48

49 MILLENNIALS ARE CUTTING THE CORD % with no cable or TV subscription 26% 12% Millennials Boomers Source: Nielsen Spectra, 2014 Mar 49

50 LESS CABLE BUT MORE ONLINE MEDIA Millennials Boomers 46% News Websites 23% 34% Watch TV online 5% 26% Newspapers Online Source: December 2013 Nielsen PanelViews Social Media Survey 22% Radio Online 14% 7% 50

51 POWER AT THEIR FINGERTIPS % Total Ownership % Millennials Ownership 51% 79% 12% expected to buy in next year 63% potential ownership Source: Nielsen PanelViews, Social Media Survey, % expected to buy in next year 86% potential ownership! 51

52 LEADING TO ONLINE SALES E commerce M commerce 70% have purchased from an online store Nielsen, PanelViews, Social Media, survey % have purchased or are willing to purchase via virtual store 52

53 KEY TAKEAWAYS Economic Divide: Economy remains sluggish; opportunities across the economic spectrum with polarizing growth Premium vs. Value Cyclical Changes: With time, the economy will improve along with consumer spending fueling growth Copyright 2013 The Nielsen Company. Confidential and proprietary. Structure Changes: The face of the Canadian shopper continues to evolve changing the retail landscape. We need to align to these trends for sustainable growth. 53

54 THANK YOU! Stay Connected to Consumer and Media Trends For the latest insights, visit us nielsen.com Download our app: Nielsen TOPTEN Questions regarding the content of this presentation, contact: Copyright 2013 The Nielsen Company. Confidential and proprietary. Carman Allison, 54

55