Supermarket Perimeter - October 2024 - 15

" A good space planning solution can analyze how different spaces
function within each store and automatically calculate how to
maximize revenue and improve sales at those locations, " Heyer said.
" That means, for instance, placing higher-margin seasonal items where
they're most likely to sell while ensuring the year-round assortment is
also properly presented. Not only can retailers increase seasonal sales,
but they can also boost sales for regular assortment products. "
Heyer added that merchandising should be assessed on a week-byweek
basis and for some departments, even daily.
" In some cases, even intra-day changes can be impactful - swapping
out lunch items for dinner items in the food-to-go section of a grocery
store, for example, " Heyer said. " Unfortunately, manually executing
planning at this level is enormously labor intensive, even with all the
associated benefits. Luckily, modern planning systems can automate
most seasonal merchandise planning processes. In the hands of a central
planning team, a solution that's been provided with sufficiently detailed
store-level information can be exceptionally powerful. The result is a
holiday season where you know you're making the most of your space so
you can concentrate on other things - above all, your customers. "
Consumers are 'feeling the chill' this winter
New York-based consultancy Bain & Company forecasts that Santa's
sleigh may be slowing down this year. Compared to 2023 (4.2%) and
2022 (4.4%), projected total retail growth for the 2024 holiday season is
3%. The forecast is even lower than the 10-year average of 5.2% growth.
Fortunately for the supermarket industry, grocery retailers are
projected to see growth anywhere between 1-5% during the holidays,
while many other retail categories will see anywhere from negative
high single digits (-5% or less) to roughly flat (-1%-1%). E-commerce is
the only category projected to have growth in the high single digits (5%
or more).
Bain reported that consumers across all income levels had a more
negative financial outlook in August 2024 than in August 2023.
Upper-income (more than $100,000) consumers' intent to spend went
from 124 in 2023 to 113 in 2024. Lower-income (less than $50,000)
consumers' intent to spend went down from 111 to 102, and middleincome
($50,000-$100,000) consumers' intent to spend moved
slightly from 110 to 109. Lower- and middle-income consumers'
overall outlooks went down by one point each, while upper-income
consumers' overall outlooks dropped from 105 to 99.
The reduction on holiday spending comes from the 4.2%
unemployment rate in August 2024 (the second-highest since October
2021); a rise in credit card delinquencies and a lower savings rate
contributing to consumers' stress; and increased costs of basic needs
like housing and healthcare taking away from potential gifting budgets.
For retailers, Bain offered the following five tips:
1. Emphasize value, no matter your price point
2. Entice consumers with intuitive search tools, personalized marketing,
relevant gift lists and timely promotions
3. Showcase exclusive products, collections, brands and partnerships
4. Delight shoppers during a stressful season with upskilled holiday staff
and more fulfillment options, including fast shipping and easy returns
5. Make omnichannel easier - utilize excess store capacity to meet
digital demand
supermarketperimeter.com
OCTOBER 2024 - 15
Target grows food business
By Russell Redman
Minneapolis-based Target's seasonal merchandising
has provided a key growth vehicle for food and
beverages, and that was no different in the second
quarter, said Rick Gomez, chief commercial officer.
" In food, comp sales growth in the low single digits
was led by seasonal moments, with hundreds of new
items across snacking, grilling and entertaining, "
Gomez said in an Aug. 21 analyst call on fiscal 2024
second-quarter results. " With exclusive-to-Target
items like Bubly's Melted Ice Pop flavor (sparkling
water), which quickly grew to be the highest-selling
item in its category, we helped guests celebrate
summer with fun, new flavors and items. "
Responding to an analyst's question, Gomez
sketched out the growth picture for Target's food
and beverage business.
" We believe there is continued runway for the business
to deliver growth, driven by a few things, " he said. " The
first is continued emphasis on affordability. As we talked
about, the 5,000 price reductions across everyday
items was incredibly well-received. We'll continue
to lean into value on food and beverage, not just
through everyday pricing but also through personalized
promotions on Circle (Target's loyalty program), as well
as with our own-brand portfolio, which offers incredible
value. The second thing that we'll continue to lean in
to drive growth for food and beverage will be newness.
Just going into the fall season, right now we have a ton
of new products coming, over 150 new own-brand
products and over 500 new national-brand products,
leveraging those flavors that everybody loves for the
fall. I'm talking about pumpkin spice, apple, pecan pie.
That will continue to fuel growth. "
The fall food assortment will span " sweet to savory "
flavors, Gomez said, with new private label and
national brand offerings ranging from pumpkin donut
holes and jack-o-lantern sandwich cookies to pecan
pie ice cream and turkey stuffing-flavored potato
chips from Target's Good & Gather brand.
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