2007 may best be remembered as the year in which value shopping made its resurgence.
Supercenters gained more than a full share point this year, after two years of modest gains. Private label share was up a half point in the fourth quarter, following five years of relatively flat share overall. The primary driver? Price.
Average CPG prices increased 4.2% last year, with double-digit increases across several key categories, including milk, eggs and refrigerated juices. These increases would be difficult for many consumers to absorb at any time, but an extremely weak housing market and skyrocketing energy costs plagued consumers simultaneously. Slow economic growth hindered CPG demand growth.
The year also delivered exciting new retail formats, health and wellness products, convenience products and sustainability initiatives. These efforts yielded store, category and brand growth as well as consumer benefits and will drive solid momentum as we move through 2008.
This report explores industry performance in 2007, drivers of performance, and what to expect in the coming year.