Nielsen reports the consumer packaged goods (CPG) industry saw a 15-fold jump in sales in mid-March as more Americans adhered to COVID-19 stay-at-home orders and travel restrictions. The sales increase totaled $8.5 billion over the same two-week period in the previous year.
Nielsen said the COVID-19 outbreak has created the fastest changes in shopping behaviors in history.
“With improvements in technology, infrastructure and experience, coupled with a reduction in barriers to trial, such as delivery length or shipping costs, buyer adoption of online CPG shopping have consistently increased over the last two years. Yet while those factors have resulted in pervasive consumer behavior changes, COVID-19 has caused another step change in the way consumers shop,” Nielsen analysts noted in the report.
They said with restaurants and bars across the country shuttered for the imminent future, consumers are spending more on food at grocery stores as families eat more meals at home. Nielsen said despite the hefty increase in CPG sales, not all categories are seeing consistent spikes. The report said categories that experienced week-over-week sales declines include toilet paper (down 29%) as households stocked-up on that product in the early days of the COVID-19 crisis. Nielsen said it is also unclear how much out-of-stocks contributed to the sales decline.
In total, the week-over-week growth of consumable products in-store increased 21%, while sales of non-consumable products decreased 2%, Nielsen said out-of-stocks likely contributed to the sales decline in non-consumables. Nielsen reports the week ending March 7, sales of CPG rose 9% in stores and 29% online compared to the same period last year. The following week CPG sales rose 45% in stores and 91% online versus a year ago.
Nielsen said as COVID-19 reached critical mass in mid-March, about one-quarter of shoppers said they expect to shop online more frequently, or for the first time, to avoid public places. Analysts expect online shopping growth to continue. In the two weeks ended March 21, more than 35% of people have shopped online for CPG items compared to a typical week.
“While grocery was a leading driver the week ended March 14, non-consumable items have carried the mantle the following week,” the report states.
While there is still much unknown about the COVID-19 long-term impact on shopping habits, Nielsen said there will likely be a “new normal” for everyone. They said forecasting sales and shipment allocations three months from now may be just as challenging as planning for the next two weeks. That means manufacturers and retailers need to leverage available assets and resources to make the most up-to-date and informed decisions while adjusting appropriately as the situation unfolds.
“And while the online growth is astounding, point-of-purchase is relative, based on the category, and understanding behaviors in the total marketplace—both online and offline—is critical,” the report states.