Shoppers changed needs carried through into 2021 – with many category growth and declines being obvious. Some though are less so. Clearly the pandemic has revived categories. However, will these categories be the most vulnerable when “normality” returns through 2022? Probably.
Take Home FMCG 10 fastest growing grocery categories in value sales % – Jan 20 vs Jan 21:
(figures in brackets are ranking based on full year 2020)
One notable theme emerging from 2020 and continuing through 2021 is range simplification and SKU reduction. Once COVID-19 becomes stable, most economies will be in recession conditions, meaning the themes of simplification and promotion reduction will persist.
Kantar data shows the UK grocery market is leading the European rationalisation evolution. Since 2018, the number of distinct SKUs purchased at Tesco has declined by 5,000 products, for example. And many retailers began through necessity as Covid began to bite.
According to research firm Assosia (w/c 15 June 2020 vs w/c 2 March 2020), 13,794 grocery products were delisted from the UK’s top six supermarkets, representing a 9% decline. Asda’s range alone has been cut by 3,847 lines (15.7%). And Morrisons has cut 2,906 products (about one in seven SKUs).
The expectation is that this rationalisation will continue – becoming more aggressive than the traditional retailer category reviews. Brands should use this opportunity to assess their own portfolio health, and plan how to reinvigorate shopper interest and retain brand loyalists to avoid penetration loss.
Source: Kantar, FMCG Panel, Filtered to categories worth >£100m in 2020
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