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    Nielsen Predicts 2010 Top Consumer Spending Trends

    Shoppers' fundamental spending adjustments are likely to last into the new year.

    NEW YORK -- While consumers around the world are more confident about the year ahead, Americans still seem relatively unconvinced there will be drastic improvement, according to Todd Hale, senior vice president of Consumer and Shopper Insights for The Nielsen Co., parent company of Convenience Store News.

    The Nielsen Co. revealed this week that consumers' fundamental spending adjustments are likely to last into the new year, either by choice or necessity. Almost one-third of consumers (30 percent) say they will use credit less even when conditions improve, while 19 percent say they intend to save more money, according to Nielsen research.

    Discretionary spending cutbacks continue to change the way consumers shop. Consumers now use coupons with an enthusiasm not seen in many years -- for the first three quarters of 2009, Inmar reported manufacturer coupon redemptions were up 26 percent.

    Food departments have outperformed non-food, health and beauty, and general merchandise departments as Americans returned to cooking and eating at home, which boosts grocery channel shopping trips in the process. Store brands grew this year, becoming an acceptable alternative -- or even preferred brand -- for many consumers, Hale noted.

    Meanwhile, consumers "traded down" across categories, preferring chicken, turkey and pork to beef and seafood. While value channels such as supercenters, club and dollar stores, as well as online retailers, drove shopping trips to their stores, discretionary retail channels (home improvement, office supply and pet stores) saw declines.

    For 2010, Nielsen predicts the Top Five Consumer Goods Spending Trends will be:

    -- Restraint remains the new normal. Americans' confidence has been slower to rebound compared to other parts of the world. The need to save money, unemployment and other economic issues continue to be top of mind, suggesting that any return to past behavior may take some time -- if at all.

    -- Value is a top priority. With no signs of readiness among consumers to open their wallets, a focus on low prices at the expense of all other variables threatens margins. Value messaging must also include some point of differentiation beyond pricing. Manufacturers and retailers that "drive the recession wave" and take an active role in innovation and ad spending are likely to be the big winners, Hale said.

    -- 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, Nielsen predicted.

    -- 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. 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.

    Related News:

    Nielsen CEO: Restraint Is New Consumer Mantra

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