Consumers go to supercenters as food prices increase

by Staff
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CHICAGO — Supercenters regained momentum in 2007 after a sluggish 2006, according to "C.P.G. 2007 Year in Review," a report from Information Resources, Inc. Supercenters advanced overall household penetration by 3.5 points and gained more than a full point in market share, representing the largest increase in three years.

In addition, I.R.I. said ingredient and energy prices forced prices of consumer packaged goods up by 4.2% with double-digit increases in categories such as milk, eggs and refrigerated juices.

The price increases had consumers turning to supercenters and private label products for lower prices. Overall, the C.P.G. industry grew 3.3% during the year.

"The economy definitely had its say in C.P.G. during 2007," said Thom Blishchok, I.R.I. president of retail solutions. "With the acceleration of prices across the board, consumers responded by refocusing on supercenters and seeking out lower-cost private label alternatives to name brand items. While at the same time, product innovation in several C.P.G. categories played a healthy role in spurring growth that we predict will be a key factor in 2008."

Innovations in beverages, health and wellness and frozen food product categories also contributed to a stronger C.P.G. showing in 2007.

I.R.I. also named emerging product trends it expects to play a significant role in 2008. These trends include food as a health solution, sustainability as a differentiator and experiential consumption.

"The C.P.G. marketplace continues to be a dynamic, flexible and innovative landscape for the purchasing aspirations of consumers," Mr. Blischok said. "Last year was a great example of the principle that when one door closes, another one opens. Manufacturers and retailers experienced changed purchase behavior in several categories yet maintained the path of innovation to keep consumers first and sales figures strong."

I.R.I. said forecasts for economic growth in 2008 suggest a significant downturn in the C.P.G. market is unlikely.

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