Great ‘State of the Nation 2025’ session with Nielsen this morning. Here are our big takeaways:

Positive volume growth, but still low at 0.6%

Sustainable growth must come from volume. We need to focus on encouraging consumers to buy more products more frequently. Consumer confidence is fluctuating and non-essential/discretionary spend is ?de- prioritised. Consumers are eating in more and scratch cooking is growing This will affect out of home sales but provide opportunities in store. Savvy shoppers are using promotions to make their budgets go further, but less people can larder fill. For suppliers this means promotional incrementaility is challenging. It’s time for back to basic growing penetration and frequency, even in mature categories. Brands need to ensure they are fortifying trust and relevance if they want? to claw back from gains made over the last 2 years in Own label. Challenger brands have grown ahead of the market, mainly due to their differentiation to stand a chance of getting listed and their agility to respond to trends.

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Loyalty has become White Noise

Shoppers now see loyalty as wallpaper a ‘discount’ they are entitled to, with an average of 5 retailer loyalty cards in their wallets. Loyalty is no longer a differentiator. True innovation must come from meaningful exchanges, such as hyper-personalization, to create reciprocal value between retailers and consumers. Omni channel engagement and consistency is key and? Social commerce is not just for the young, especially in Health and Wellness, where tik Tok is the 3rd biggest retailer. Social Commerce is where physical and mental availability converge. Rapid delivery route to consumer can ?exploit the strong mission of “ Dinner for tonight” and “ need a treat” impulse buys. Are your brands, offers and messaging consistent across these channels?

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Consumer Confidence Outlook is Uncertain

Consumers feel worse off than last year and expect a downward trajectory. Cautious consumption is at its peak due to low consumer confidence and sentiment. Consumers ideally would like to save and they take this mindset into store

‘Treat’ culture is here to stay

The lipstick effect of the cost of living crisis is evident in the growth of treat products, especially within impulse categories. People seek joy in the mundane through these small indulgences.

HFSS Innovation is struggling

While HFSS innovation is significant, it isn’t making a substantial positive sales impact. Suppliers face the challenge of changing formulations while dealing with volume declines. Consumers still crave a true treat and retailers and suppliers need to recognise this and meet consumers’ needs! Can challenger brands exploit their agility to win in innovating in HFSS? However, health and wellness is a strategic imperative. It’s not a ?flash in the pan, but price vs consumer experience must be right to change behaviour. Health means different things too, so consumer insight is key to investing in the right areas. ?Health and cost of living are a current trade off ?pendulum but Health needs are here to stay.

Winning Retailers Focus on Frequency

Retailers who are winning are doing so by increasing visit frequency. We are back to pre-pandemic levels of weekly visits, but basket sizes haven’t increased. The key metric this year is getting shoppers to return more often and fostering true loyalty, despite the prevalence of discount cards.

Smaller format stores are growing their share and moving to offer value as well as traditional convenience

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What does this all mean for retailers and suppliers?

If we could sum it up in one sentence it would be this: The brands that will win are the ones that will connect with consumers and shoppers by creating value through being trusted on price, trusted on quality and trusted on purpose.

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2025 will be challenging but we are ready for it! Are you?!

Get in touch with Bridgethorne to discuss how we can help you develop the compelling category stories, strategies and shopper activations to win in a challenging market. Email [email protected]

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Thanks for this morning #NIQ