Consumers are going to continue to be frugal in 2010, and grocery consolidation will likely change the retail landscape, according to a report of the top five consumer goods spending trends from The Nielsen Co.


The New York-based market research firm reported that food departments outperformed non-food, health and beauty and general merchandise departments at U.S. retailers in 2009, evidence of the number of Americans cooking at home instead of eating out. Supercenters, club and dollar stores and online retailers reaped the most benefits, as retailers in other segments, such as home improvement, office supply and pet supply outlets, were hurt significantly, according to the report.


The U.S. is behind other countries in recovery, especially when it comes to consumer confidence, so shoppers in the states will continue to use more coupons, restrain discretionary spending and sniffing out values, report author Todd Hale, senior vice president of consumer and shopper insights, wrote.


The top five consumer goods spending trends for 2010 are:



  1. Restraint remains the new normal;
  2. Value is a top priority;
  3. Store brand growth continues;
  4. Grocery consolidation intensifies; and
  5. Assortment wars escalate.

In the report, Hale suggests that manufacturers and retailers that take an active role in innovation
and ad spending are likely to be the big winners, because value messaging must differentiate beyond pricing.


Although the produce department isn’t as store brand-laden as the inside of the grocery store, private label has been picking up in fresh produce, as well. The Nielsen report suggests retailer focus on store brands has never been stronger.


Also within the store, retailers are expected to continue with efforts to simplify the shopping experience, often by eliminating side displays.


“Retailers may lose sales as they shift away from in-store merchandising that drove impulse buying and built shopper baskets,” the report states. “Look for brands caught in the trap of greater store brand focus and assortment optimization to forge alliances with key retailers, enter of step-up efforts as store brand suppliers, and/or explore direct-to-consumer sales.”


The bigger picture prediction is that local and regional independent retailers may find themselves to be acquisition targets for larger chains. Those larger chains are also expected to shift their focus to their most profitable formats and banners, and likely cut investments to the less profitable, the report said.