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8/6/2008
Ground-Breaking IRI Economic Study Finds Broader Mix of Consumers Turning to Walmart
Second Part in a Series of IRI Studies Explores Wal-Mart’s Role in Helping Consumers Navigate Transforming Economy
CHICAGO, Aug. 6, 2008 – As consumers modify their shopping patterns to try to save money on both their gas and consumer packaged goods (CPG) expenditures, they are turning to supercenters to find bargains. Many are finding these great deals in Walmart, which is now posting share gains in 84 percent of top 100 CPG categories. IRI is taking a closer look at the retailer’s latest success in its economic study, “IRI Times and Trends: Walmart: Helping Consumers Navigate a Transforming Economy,” which explores Walmart’s role in helping consumers navigate in a transforming economy through strategies to deliver affordable products and healthcare and an enhanced shopping experience that will keep consumers coming back for more even after economic conditions improve.
“Consumers are facing a full-on financial assault as prices for gas, energy, food and other necessities rise to historic levels,” says President of IRI Innovation and Consulting Thom Blischok. “Low prices and one-stop shopping have proven to be an incredibly powerful combination at a time when consumers are forced to strategize to maximize gas usage and stretch budgets as far as they will go. Walmart is exceptionally well-positioned for growth.”
“The economic shift is also driving new rituals,” continues Blischok. “From dining at home with friends to in-home beauty treatments, consumers are finding a more economical way to continue their routines. And, it doesn’t stop there. Some consumers are also turning to over-the-counter remedies instead of running to the doctor, switching to less expensive brands, and stretching usage across personal care products. The sea of economic uncertainty is troubling to consumers, so retailers and manufacturers across the board have a unique opportunity to help them forge a new path.”
Report Highlights
Walmart strategies, coupled with economic conditions and resulting shifts in consumer shopping habits, drove a rebound in the first quarter of fiscal year 2009, and this strong momentum will likely carry through the balance of the year.
While lower- and middle-income consumers stepped up spending at Walmart early in the economic downturn, upper-income consumers significantly increased the share of CPG spending allocated to Walmart during the past six months, as gas prices skyrocketed.
Walmart strategies that are hitting the mark with consumers include the company’s $4 prescription program aimed at building Walmart pharmacy as a destination location, a price leadership position in core food categories, and an enhanced shopping experience, including wider aisles and more targeted product assortments.
The IRI study uncovered the following findings:
- Walmart’s share of CPG spending has increased as gas and CPG prices have escalated; sizable share gains occurred across income segments, but at different stages of the economic downturn.
- While economic conditions are playing a major role in Walmart’s rebound, company strategies delivering affordable products, affordable healthcare and an enhanced shopping experience are also a driving force that will ensure continued positive momentum after economic conditions improve.
- Increased Walmart share across meal ingredients, meal components and convenience meals is further evidence that Walmart is playing an important role in helping consumers navigate this economy; these categories are growing as consumers get back-to-basics in meal preparation to save money.
- While Walmart private label share has declined throughout this period overall, emerging trends suggest that private label could take on a more prominent role within Walmart.
“Walmart has a unique window of opportunity to expand sales among core lower-income consumers and to build relationships with middle- and upper-income shoppers that will last beyond the current economic crisis,” adds Blischok. “This opportunity is not limited to Walmart, though. Retailers and manufacturers across the board also have the ability to meet changing consumer needs. Our research uncovered some important action steps that they can take to maintain market share and build loyalty.”
About the Report
The Times & Trends report, “Walmart: Helping Consumers Navigate a Transforming Economy,” is available from IRI, the leading global leading provider of consumer, shopper, and retail market intelligence and insights for the consumer packaged goods (CPG), retail, and healthcare industries. The findings of this report were compiled based on IRI MarketInsight™, IRI Consumer Network™ and the IRI Competing in a Transforming Economy study. To download the report, visit the IRI Insights Library.
About Information Resources, Inc.
IRI is the world’s leading provider of consumer, shopper, and retail market intelligence and insights supporting 95 percent of the FORTUNE Global 500 consumer packaged goods (CPG), retail and healthcare companies. Only IRI offers the unique combination of integrated market information, automated and predictive analytics, innovative enabling technologies, and domain expertise. With IRI, leading retailers and manufacturers are able to quickly discover breakthrough insights driving smarter decisions and actions across the enterprise for breakthrough results. Companies around the world depend on IRI for improved productivity, stronger brands, and dramatic revenue growth. For more information, visit http://us.infores.com.
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IRI CONTACTS:
John McIndoe
E-mail: john.mcindoe@infores.com
Phone: (312) 474-3862
Fax: (312) 474-2512
Shelley Hughes
E-mail: shelley.hughes@infores.com
Phone: (312) 474-3675
Fax: (312) 474-2512
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Summit 2009 Insights
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