italy provides insights into new normal...2020/04/08 · iri covid-19 portal for ongoing local and...

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


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


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


Covid-19 HITS HARD,lockdown is enforced and we enter the 1st phase

P A N I C21st Feb 2020


Phase 1Panic


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


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


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


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%


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%


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


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


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


How did lockdownaffect the types of purchases shoppers were making?


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


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%


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


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


New consumer experiences are developing as retailers look to reinvent their offer


Phase 2Divergence


Phase 2 - Divergence

Source: EIEF


Until 3rd week

of Feb 2020

Since


1000

2000

3000

4000

New

po

sitiv

e

ca

se

s

ObservedPredicted


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


Phase 3New Normal


Phase 3 – New Normal

Source: EIEF


Until 3rd week

of Feb 2020

Since


1000

2000

3000

4000

New

po

sitiv

e

ca

se

s

ObservedPredicted


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

€


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

https://www.iriworldwide.com/en-GB/Insights/Publications/coronavirus

https://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

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Chambourcy Cedex

+ 33 (0) 1 30 06 22 00

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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

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italy provides insights into new normal...2020/04/08 · iri covid-19 portal for ongoing local and...

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