Retail Industry Insights
Unilever reveals the world's consumer habits
You probably have a Unilever product at home. The giant Anglo-Dutch conglomerate makes everything from Dove soap to Lipton tea to Axe body spray. It has world's largest ice cream business, with brands like Ben & Jerry's, Breyers, and the Magnum-making swirly heart brand whose name inexplicably changes in every country.
Unilever's latest earnings report reveals the world's shifting buying and using habits
Source: Unilever Q1 2020 trading statement - 4/23/2020
"Less hair washing"
An actual line from Unilever’s earnings presentation — it knows you're using less of its big TRESemmé bottles. As the WFH and Zoom-in-your-pajamas life takes over, people are doing less shaving, hair washing, and deodorizing — 11 fewer "personal care" usages every week.
Personal care products:
deodorant and shampoo were hoarded at the beginning of lockdown — now they're being used (and bought) way less
In-home food products:
Ben & Jerry's pints and Hellman's mayo saw a sales surge, but out-of-home food sales plummeted as most restaurants, movie theaters, and public venues closed
Costco sales fall for first time in a decade — it's not all gloom and doom for the retailer:
February sales jumped 12%: at the start of the lockdown panic — shoppers flocked to Costco for cart-full of food and cleaning supplies.
March sales spiked 10%: People who didn't panic hoard in Feb started panic hoarding —you remember the great toilet paper panic.
April sales fell 5%: In part to stay-at-home orders and scaled back service in areas like the Costco food court.
But what is really behind April's numbers? Gas. Gas sales make up 11% of Costco's revenue. Oil prices took a nosedive in April, even going negative at one point. On top of that plunge, Costco members were driving way less. Costco blamed 70% of its April sales drop on low gas prices/demand.
Target said on April 23 it has increased staffing of its same-day services as a result of increased demand. Target previously announced in early April that it would actively monitor and limit the total number of people inside of stores when needed. Signage, floor decals and audio messages were also installed in stores to encourage social distancing. The mass merchant also announced reduced hours, with all stores closing by 9 p.m. local time. Every Wednesday morning, Target offers a dedicated shopping hour for “vulnerable guests.”
Target gave an update last week on its recent performance ahead of its first quarter earnings release. The update caused its stock price to tumble due to guidance that its first quarter profits will be by hurt by higher costs. Brian Cornell said he expects guests will continue consolidate their shopping into fewer trips. He said that trend would benefit the big-box store, too, since it sells many items from medicine and groceries to clothing.
Quarter-to-date same store sales increased +7% and gaining market share
Essentials and Food/Beverage comp sales +20%
Hardlines comp sales +16%
Apparel and Accessories comp sales -20%
April-to-date digital sales increase +275%!
Drive up volume +7x higher than normal
Order pickup daily volume has been twice as high as Cyber Monday
Shipt volume on the Friday before Easter was more than it typically fulfills in a week
Margin pressure continues based on Target’s current sales mix (less higher margin, more lower margin) and the additional store expenses.
CPG & Retail
One-in-four CPG posts revolve around alcohol, with an increasing number of people posting while drinking. Day drinking is becoming more popular.
On social, the trends of eating comfort food and drinking alcohol in quarantine go hand in hand. Consumers consider eating the food they love as a form of self-care.
Curbside pick up was the leading trending topic this week in grocery store posts.
Difficulties with online shopping are a common talking point, including delays in delivery, lack of delivery slots, online shopping scams and fraud, as well as difficult return processes.
Source: Brandwatch CoVid19 Bulletin