Traditional grocers are losing out on sales of snack foods to competing channels as consumers look for ways to get more for their money.
While supermarkets managed to sell nearly 160 million packages of snacks during the year that ended in late March, according to recent data from NielsenIQ, grocers lost about 56 million units – almost $250 million – in snack sales to mass merchandisers and club stores during that time.
What’s going on? Penny-pinching consumers are spending less of their food budgets on snacks. NielsenIQ says the number of people spending up to a quarter of their budget on snacks is shrinking while those spending up to 10% is growing.
And while grocers are luring more impulse purchases away from c-stores, they’re losing folks in greater numbers to club and mass, while buying snacks less often overall.
What’s the good news? NielsenIQ says nearly two-thirds are buying their snacks in larger pack sizes to save money – super for supermarkets, which offer a full range of packaging sizes and formats.
What’s the solution? Target that demand – build your merchandising around strategically priced solutions featuring formats that deliver the most value to consumers. Be sure you’re staying on top of snacking trends for flavor, convenience and nutrition.
An added bonus: NielsenIQ says 80% of consumers think private label snacks are as good or better than name-brand products, with Gen Z’s shaping up to be leading drivers in the PL segment. Also, more snack purchases are shifting online, so stay on top of your e-commerce program.
While budgets are tighter, consumers remain open to splurging on affordable indulgences like snacks and candy. Even so, maintaining a strategic outlook to shore up grocery’s share of snacking is key to success in a volatile economy.
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