Analysis

5 Key Consumer Trends Shaping Grocery

Analysis

5 Key Consumer Trends Shaping Grocery


In 2023, the grocery department grappled with the impact of inflation and other challenging factors that affect demand. Grocery industry trends show the category was the recipient of some benefits from these factors, but there were also some difficulties that are still lingering.

So, where should you focus your efforts in 2024? The key lies in understanding the way consumers are shifting their behavior and how much. That requires taking a closer look at the data.

Read on to learn about some of the biggest grocery industry trends in 2024 and what they may mean to you and your brand.


In 2024, the CPG industry as a whole is trying to recover from the challenges of 2023, and grocery is no exception. At the forefront are increased prices due to rampant inflation. In 2023, the average unit price increased between 4-8%.1 Some departments were even more impacted, with Dry Grocery seeing 10% price increases.1 In conjunction with rising prices, consumers are shifting their habits to make their dollars go further and cover the basic necessities. Unfortunately, many grocery products just don’t make the cut when consumers need to decide between necessities and nice-to-haves. This means many grocery brands need to reevaluate their pricing and promotion strategies to better align with consumer needs and avoid getting left on the shelf.

With that in mind, here are 5 key grocery trends you need to be aware of as you continue building your growth plan:

1. Private Labels are Making Gains

For years, retailers have been working to improve the quality and market share of their private-label product offerings. For example, according to NIQ data, private label sales reached 19.4% of dollar share, up 5% YoY.2 But, the market looked a bit different in 2023, and private label brands saw stronger growth as inflation continued to shift the market. So, does the new year bring relief? Not necessarily. Even though Private Label showed slow growth in Q4, it’s still outpacing National Brands​

This means grocery brands need to work even harder to compete with private label growth. Some ways to compete include building brand loyalty, leaning into product innovation, and optimizing your pricing and promotion strategies to compete. Understanding why your consumers may be shifting their behaviors can help you react more effectively.

2. Sustainability Matters to Consumers

One thing is very clear: sustainability matters to the public. Almost all consumers (95%) say they are trying to take some action to live sustainably.3 The grocery vertical is no exception with, “free-from” and allergen claims becoming more popular on-shelf. With these intentions made clear, there is ample opportunity for grocery brands to align their product offerings and marketing to match this demand.

Yet, NIQ data shows that 26% of shoppers find it difficult to find sustainable products on the digital shelf.3 It’s clear that brands and retailers need to make it easier for shoppers to discover and purchase planet-friendly products. This requires making their sustainability attributes accessible on product pages and clear on packaging. Utilizing Better For SegmentationTM to more accurately target your consumers and maximize the impact of your product attributes can also help.

Consumer Outlook 2024

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Consumers have been tested in more ways than one over the past year—and beyond. Pockets of growth have emerged as consumers pivot spending behaviors to survive and thrive. Dive into a high-level view of this year’s global report.

3. Value Shopping is Up

Another notable reason for the unit sales drop is consumers shopping at value retailers. In 2023, value price tiers were the only group to see sales share growth (+0.6 pts).4 Additionally, more than a quarter of Americans are buying larger sizes of products with long shelf lives as a savings strategy to get a lower cost per use.5 As a result, value retailers are seeing an uptick in consumers seeking out these larger quantities at a price that works for them. Unfortunately, this means many premium brands are losing out on sales to less-expensive alternatives.

To stay relevant with these shifting consumers, more premium grocery brands may need to do a better job of conveying the true value of their products and position them as purchases worth the extra expense. This may be due to the quality of the product, its innovative nature, or some other differentiator. The key to marketing your products to this segment is to understand what other factors they care about beyond just product price.

4. Promotions are Major Drivers

In 2024, consumers are becoming loyal to being disloyal by buying on promotion. Promotional sales continue to gain momentum, particularly in the Grocery and Perishables departments. For example, 30.7% of Dry Grocery sales were made on promotion last year, up 14% YoY.6 While the Frozen department saw 26.8% of sales on promotion, up a whopping 22%.6 But, this growth means it’s even more important to understand how effective your promotions are and whether they’re actually adding any value.

Grocery brands should also consider their omnichannel shoppers when planning out promotions. Customers need a reason to interact with both physical and online purchase paths. If your promotion only targets one channel, you may be missing out on sales in another. But, you’ll also want to identify your omnichannel split and determine which consumers are the most likely to give you the best benefits from a promotion. If all of your online sales occur on promotion, there may be an issue.

5. Omnisales are Growing, but Slowly

The omnichannel retail landscape in 2024 is shifting. While eCommerce shopping has been growing for years, in 2023, online sales outgrew in-store by nearly 3x the rate.7 Online sales grew by 11% to reach 17.3% of total sales, while in-store only grew by 4%.7 Even better, the area with the most opportunity for online sales growth going forward is Food. Yet, the online market for Grocery still lags behind other categories.

Growing a grocery brand and increasing sales in an omnichannel world requires focus and accurate, actionable data. Tracking retail sales, market trends, and consumer behavior all play a role. Only then can your product offerings align with consumers’ needs and be visible across all channels. These small details can help you optimize your strategies to get the best impact and meet the consumers where they want.


Just knowing what’s happening in the market isn’t the same as knowing how to turn it into revenue. The key lies in getting accurate and reliable data, paired with guidance on what the data means and how to use it. Acting on sub-par data usually leads to sub-par success. Unfortunately, for many emerging and growth brands, the idea of spending their budget on data and insights can seem like more trouble than it’s worth. This means they can never act on complete data and get the most out of their products.

The true value of high-quality data and insights can be seen in your ability to identify emerging issues and trends and act on them. For example, nearly 50% of all promotional sales are sales that would have occurred regardless of the promotion. Without data showing you this gap, you’d be leaving money on the table with every promotion. You need to use data as the foundation for your planning and act intelligently to align your brand with the markets without sacrificing quality, brand, or market share.


Build a Better Grocery Brand with the Full View

Keeping pace with shifting grocery industry trends requires understanding customer behaviors, sales trends, growth opportunities, and future demand. Which is a lot to ask if you don’t have access to accurate data and valuable insights. The experts at NIQ are here to help.


No matter your size or state of growth, NIQ provides the Full View of the market at a price that fits your budget. For emerging brands, Byzzer™ by NielsenIQ provides access to the essential data they need to successfully react to these shifting tides and build growth strategies.


Talk to our experts about new options custom-built for emerging and rising brands alike.


Don’t miss out on the market’s best data and expert insights to help you keep brand growth strong in 2024 and beyond!

Sources:

1 NIQ, Total US xAOC, 52 weeks ending December 30, 2023

2 NIQ, Total US xAOC, Private Label Dollar Sales: 5 weeks ending December 30, 2023

3 NIQ Report – The changing story of sustainability

4 NIQ 2024 Consumer Outlook Report

5 NIQ, Total US xAOC, YTD: 39 weeks to September 30, 2023

6 NielsenIQ, Total US xAOC, – Promotional Dollar Sales Q4’23: 13 weeks ending December 30, 2023​

7 NielsenIQ, Omni Sales – 52 weeks ending December 30, 2023