Inflation. Continued pandemic behaviors. The convenience of the internet. Oh my!

At the surface, and in light of 2023, CPG industry trends seem volatile. However, with a view across a multi-vertical portfolio, Salelytics is here to tell truth from mere speculation.

Inflation and CPG Promotional Efforts

• Underlying promotional shopping behaviors have stayed the same. In fact, regular promo users (1/3 of the US) have just doubled down on usage.
• Rare promo users have maintained their behaviors, despite higher inflation.
• A middle-of-the-road promo user will continue to take advantage of promos when trying new products.
• Those who rarely use promotions claim the same barriers as before - specifically citing that it may not be worth the time.
• Income is NOT a predictor of these behaviors.
• Those who use promotions can be divided into those who regularly use, moderately use and rarely use promos, with 1/3 of those who use promotions falling into each group. 

Continued Pandemic Behavior 

• Onsite activity has varied with the introduction of accessible home gym solutions, technological advancements, and how people are meeting basic needs.
• Foot traffic at fitness locations and related facilities was 32.2% lower in Jan. 2021 than it was in Jan. 2018.
• In offices, foot traffic was down over 50% in Jan. 2022 compared to the same month in 2019.
• However, people are returning to the grocery store. Despite inflation and pandemic behavior, grocery stores are seeing more traffic than before the pandemic. Visits were around 5% higher at the end of 2022 than they were in 2019.
• “We have food at home” is what every parent is saying in 2023 as grocery spending has increased by over 6% in the last quarter of 2022.
• (Data originating from Placer.ai)

Convenience of the Internet

• Convenience, while important, does not make or break a consumer’s decision. In-person shopping is ramping up.
• E-commerce may have grown during the pandemic with social distancing, but people miss physical experiences.
• E-commerce made up 14% of all retail sales at the end of 2022 (a 3% raise since 2019).
• Yet superstores (Target, Walmart, etc.) are seeing the same traffic in 2023 as they did pre-pandemic. And monthly visits to discount stores are up by 21% in 2022.
• Many CPG manufacturers can rest easy as more and more people spend their time in beauty stores (Visits were 20% higher to these locations in February 2023 compared to 2020). People want to see and feel these products up front rather than trust sources from the world wide web.
• (Data originating from Placer.ai)

Overall, the future of CPG is not as capricious as it may seem. Though the factors of the world can be intimidating, consumers are spending, choosing select pandemic behaviors to maintain, and returning to brick-and-mortar locations. At this point, it’s up to the org and its marketing to capture the consumer’s attention.