CHICAGO — As IRI continues to monitor the pandemic, we are launching a special four-part series, “Recession-Proof Your Business.” While COVID-19 is unique in scope, social and business implications, the company already sees that consumer behavior mirrors that of past recessions, including the Great Recession of 2008-2009.
The first installment of their series takes a closer look at “How the Great Recession Reshaped the CPG Demand Curve” and provides a road map for responding to consumers in the current pandemic by studying the shifts in shopping behaviors, including stores visited, products that were purchased and how consumers worked to save money.
Lessons Learned
The CPG industry is more resistant to recession than other retail channels, but consumers in the new recession are short on confidence and money and are greatly concerned with personal health, which all impact retail.
Shopping Shifts
- As prices increased, shoppers cut back on many CPG purchases
- Purchases shifted to value-tier brands
- Consumers made fewer impulse purchases
- Consumers searched for deals and took advantage of promotions
Channel Shifts
- Shoppers migrated to value channels
- Regional grocers won share by increasing selling space and tailoring assortment to best suit their shoppers
- Traffic and sales thinned in convenience channel
Category Shifts
- General merchandise and beauty and personal products were negatively impacted
- Consumers sought affordable luxuries
- Brand loyalty suffered as consumers worked to save money
- Consumers switched to smaller and value packs
- Perceived as expensive, organic produce suffered
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