italy provides insights into new normal...2020/04/08 · iri covid-19 portal for ongoing local and...
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April 8, 2020
ITALY PROVIDES INSIGHTS INTO NEW NORMAL
COVID-19 Implications
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 2
In this Issue of IRI’s Covid-19 Report
The old “normal” - A brief overview of life and the Italian market before Covid-19
The 3 phases - An introduction to the theme of Covid-19 market phases and the shopper impact
Thoughts on Phase 3 - The new normal
▪ Focus on Phase 1 - Panic
▪ Focus on phase 2 - Divergence
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 3
The old “normal”
FMCG EUR
67Bn+1.7%in 2019
Prices flat
+0.3%Historically trading up
Price promotions
27%of sales
Private label share
20%
Hypermarkets
12%Supermarkets
51%Convenience
10.7%Hard Discounters
17%Drugstores
5%Online
1.0%40%Two major players 70/8
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 4
Prior to Covid-19 shopping behaviour was fairly predictable
80€
1 every 3wks
Hypermarkets
40€
Weekly visits
Supermarket
10/14€
2Xwk
Fresh (Milk, Veg, Diary)
Convenience
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 5
Covid-19 HITS HARD,lockdown is enforced and we enter the 1st phase
P A N I C21st Feb 2020
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 6
Phase 1Panic
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 7
Phase 1 - Panic
Source: EIEF
Panic Phase Divergence phase New NormalOld Normal
Until 3rd week
of Feb 2020
Since
mid-May 2020Feb19 Mar11 Apr04 Apr22 May13
1000
2000
3000
4000
Ne
w p
ositiv
e
ca
se
s
ObservedPredicted
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 8
4 weeks of stockpiling, weeks 5&6 sales growth rate slowdown.
Value sales % trend vs Previous Year
-0.7%
1.4%0.1%
-1.0%0.3% 0.5%
8.0%
11.6%10.6%
15.9%
5.0%
1.5%
12-Jan 19-Jan 26-Jan 2-Feb 9-Feb 16-Feb 23-Feb 1-Mar 8-Mar 15-Mar 22-Mar 29-Mar
21/02 Coronavirus in Italy,
selected restrictions in place
11/03: National Lock Down
and restrictions in place
Less panic
Reducing pantry stock
Source: Infoscan Census Hypermarkets, Supermarkets, Small Super, Discount, Drugstores
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 9
During week 1 people’s concerns immediately focussed on the economy and
personal health
Major concerns (scoring 9-10)
Source; IRI Shopper research at week 1 of National lockdown.
Economy Personal
health
Access to
healthcare
Family
income
Fear of
job loss
Price
increase
Product
availability
62% 58% 46% 43% 39% 33%(19%
2 weeks ago)
20%,13%
Expectations changed from thinking this will
continue until end May to now mid of June
18% of people thinking this will last at least 6
months, versus 10% 2 weeks prior
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 10
TV
Reading Listening to music Video Games; Working from home
Internet Social Media
Online competitions
How Italian people are occupying their extra time at home
38% 35% 14%16% 8%
53%68%
Chatting to friends/family
40%40%
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 11
Spend time with kids;
DIY
Family games
More home cooking; HobbiesCleaning home
Home treatmentsFitness;
How Italian people are occupying their extra time at home
47% 45% 25%53%
19%23% 14% 12%
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 12
The impact on media consumption has been stark
More time at home
What’sApp video calling Instagram Facebook Live
+1000%
group calling last month.
Instagram and Facebook Live
views doubled in a week.50%
messaging
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 13
In weeks 4-6, smaller stores saw huge sales growth due to their proximity, less
queuing and neighborhood home delivery
Value sales % trend vs Previous Year
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
12-Jan 19-Jan 26-Jan 2-Feb 9-Feb 16-Feb 23-Feb 1-Mar 8-Mar 15-Mar 22-Mar 29-Mar
Hypermarkets Super Small Self-service Drugstores Discount
Source: Infoscan Census Hypermarkets, Supermarkets, Small Super, Discount, Drugstores
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 14
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 15
Restrictions have resulted in channel switching and retailers were surprised by
demand. Offering Click & Collect is simpler than developing the infrastructure for
home delivery
61%49% 45% 47% 42%
101%
81%90% 87% 88% 87%
52%
88%
67% 70% 74%82%
94%
69%
114%
90%77%
91%103%104%97%
119%
82%
124%120%137%138%
118%
139%
107%
153%156%153%
182%
152%
208%
137%
0%
50%
100%
150%
200%
250%
%chg value sales versus yr ago
On-Line
86%72% 68% 74%
57%
98%
205%231%
357%327%
282%
103%
66%
144%174%
226%249%
277%
175%145%154%
250%
340%
433%427%
237%
172%
251%
391%
460%
550%554%
263%
175%
259%
369%
468%
539%531%
241%
200%
303%
60% 48% 44% 46% 41%
102%73% 83% 77% 78% 79%
48%
92%63% 66% 68% 75% 85%
60%
109%85%
69% 80% 90% 91% 87%111%
72%
112%107%123%123%
109%134%
99%
143%144%140%168%
146%
210%
130%
0%
100%
200%
300%
400%
500%
600% Click&Collect Home Delivery
29.03.20
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 16
How did lockdownaffect the types of purchases shoppers were making?
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 17
Italian shoppers reduced their shopping trips, filled their baskets and bought
essentials that would last
Reduced frequency
Supermarkets +
Convenience
1 visit less
You can’t move and
focus your shopping
on your
preferred stores
Increase average basket
(Supermarkets format)
from 45EUR to 76EUR
Top growing categories
• Alcohol x 3
• Wipes x 2
• Gloves x 2
Essential categories
since Feb 23 growth
+20-40%;
Long lasting proteins
Legumes +80%,
Canned meat +72%Eggs, Milk, Canned Tuna, Cheese, Pasta,
Frozen food, Coffee, Tomato sauce
2
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 18
Working from home and having children at home has severely impacted the sales of
some categories
Source; IRI panel, Total Italy, Value sales % chg versus year ago, 6 weeks ending 29.03.20
Snacks
YeastPizza
preparationFlour
Sweet treats
Growth in home baking
-0.7% -8.9%
+119.5% 98.6%+117.6%
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 19
Private Label has become more important over time
21.7% 21.7% 21.6% 21.3% 21.3% 21.2% 21.5% 21.9% 22.1% 23.9% 23.8% 23.6%
78.3% 78.3% 78.4% 78.7% 78.7% 78.8% 78.5% 78.1% 77.9% 76.1% 76.2% 76.4%
12/1 19/1 26/1 2/2 9/2 16/2 23/2 1/3 8/3 15/3 22/3 29/3
Value share
PL Brands
0.3 0.6 0.5
0.7 0.8 0.7 0.8
1.4 1.5
2.8 2.3 2.3
-0.3 -0.6 -0.5
-0.7 -0.8 -0.7 -0.8
-1.4 -1.5
-2.8 -2.3 -2.3
12/1 19/1 26/1 2/2 9/2 16/2 23/2 1/3 8/3 15/3 22/3 29/3
Share change versus previous year
PL Brands
P
Source: IRI Panel Hypermarkets, Supermarkets, Self Service
Weekly Panel
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 20
What has been the impact for out of home retailers and how have they adapted?
Source: IRI estimation based on Gira Italian Horeca Report
34.3% of all food
occasions were
out of home in
2019
80% = €6,7Bil
lost by 260k bars &
restaurant in March-
April
Net value lost =
- €4.5 bil in March/
April (6.7bil -2.2bil)
Conversion
into Home
consumption =
€2.2 Bil additional
expenditure is
supermarkets or so =
+10/15% potential
growth impact
Assumption: meals &
breakfast at home
prices = 1/3 of
Horeca prices
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 21
New consumer experiences are developing as retailers look to reinvent their offer
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 22
Phase 2Divergence
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 23
Phase 2 - Divergence
Source: EIEF
Panic Phase Divergence phase New NormalOld Normal
Until 3rd week
of Feb 2020
Since
mid-May 2020Feb19 Mar11 Apr04 Apr22 May13
1000
2000
3000
4000
New
po
sitiv
e
ca
se
s
ObservedPredicted
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 24
Features of phase 2
Restrictions still in place
Lower income
Hard basic
Supply chain shortage might
push for price increase
Increased volume due to out
of home diverting in home
Emotionally relaxation
Financially stability
Comfortable
The state of people’s
personal finances will drive
competitive pricing
Reduced stockpiling
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 25
Phase 3New Normal
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 26
Phase 3 – New Normal
Source: EIEF
Panic Phase Divergence phase New NormalOld Normal
Until 3rd week
of Feb 2020
Since
mid-May 2020Feb19 Mar11 Apr04 Apr22 May13
1000
2000
3000
4000
New
po
sitiv
e
ca
se
s
ObservedPredicted
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 27
Phase 3 – what does the new normal look like?
Economic
recession
Health & hygiene
concerns
Social
distance
Limited OOH
consumption
Online, Home
delivery
Immersive digital
existence
€
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 28
IRI COVID-19 Portal for ongoing local and global insights
The IRI COVID-19 Info Portal
Includes COVID-19 impact analyses, dashboards and the latest
thought leadership on supply chain, consumer behaviour, channel
shifts for the international and local markets
All reports and insights available in IRI’s COVID-19 portal: www.iriworldwide.com/en-GB/Insights/Publications/coronavirus
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 29© 2020 Information Resources Inc. (IRI).
Confidential and Proprietary. 29
CONTACT U.S. FOR MORE
INFORMATION
IRI U.S. / Global HQ
Chicago, IL
+1 312.726.1221
IRI France
Chambourcy Cedex
+ 33 (0) 1 30 06 22 00
IRI Germany
Düsseldorf
+49 211 361190
Report Author: Livio Martcuci,
Director, Global Analytics & Consulting, Itlay
IRI Italy
Milan: +39 02 52579 1
Rome: +39 335 73 12 283
IRI New Zealand
Ellerslie, Auckland
+64 9526 5408
IRI United Kingdom
Bracknell, Berkshire
+44 (0) 1344 746000
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