Sales for U.S. grocery retailers and some of the country’s largest fast-moving consumer goods (FMCG) manufacturers, have gotten off to a rocky start . According to Nielsen, growth in the first three months of 2017 was slow for many categories across the store, and as a result, manufacturers have trimmed their once-plentiful marketing and advertising budgets.
“The softness and slowed growth clearly illuminates how the U.S. retail landscape is in the midst of the fastest transformation it’s seen in modern history. Within the first quarter of 2017 alone, sales of FMCG at U.S. brick-and-mortar retail stores were nearly USD3 billion lower than in the same period in 2016,” says Nielsen.
Consumers are also swapping center store grocery and frozen foods to produce and deli, buying more fresh and prepared items over the last few years. The USD332 million declines in frozen foods account for nearly one-10th of total declines.
“While more than half of the total decline came from Easter and deflation, respectively, consumers’ changing preferences are also affecting growth. Consumers’ growing focus on health and wellness is directing them toward healthier foods from the fresh department; they’re exercising dietary diligence and buying less dairy, especially yogurt and cheese, and instead, swapping them out for other products or shifting to out-of-home channels,” concludes Nielsen.
