MANUFACTURERS need to be agile to meet the changing consumer needs around health, safety and income, as they look to economize amid the economic crisis.
Euromonitor International senior research manager Camilla Butler said non-discretionary industries will weather 2020 better than the previous forecast, with coronavirus lockdown resulting in a surge in home eating, drinking and cleaning, all boosting retail sales.
“However, in the longer term, value growth is not assured, and as recessionary effects impact, consumers will look to maximize value by shifting to private label, seeking out discounts, and de-prioritizing premiumization, as well as looking for a new set of values in their products,” she said in a report.
Butler said some fast-moving consumer goods like fresh food, hot drinks, packaged food, retail tissue, hygiene and home care will substantially outperform their pre-coronavirus disease 2019 (Covid-19) expectations.
Others, such as alcoholic drinks, will grow but at a slower rate; while luxury goods and apparel and footwear, sustaining exceptionally heavy losses, she said.
“Their defining characteristics are both their level of exposure to non-discretionary spend and that they are benefiting from work, social, and eating occasions moving into the home.
However, 2020 will be a tricky year even for those industries that are seeing a surge in demand as they face headwinds from the expected global economic recession, she added.
Butler said eating occasions have shifted into the home, with consumers cooking using local produce with a focus on healthy nutrition, benefiting retail sales of both packaged and fresh foods.
She said sales of packaged food and fresh food are thus set to increase by three percent and four percent, respectively, on their pre-Covid-19 forecasts.
“However, the longer term poses risks to value sales as consumers look to economize on food spend by trading down and searching out discounts as the recessionary effects impact,” she added. (PHILEXPORT NEWS AND FEATURES)