NIQ Global Intelligence plc · NYSE:NIQ

NIQ Global Intelligence — NielsenIQ — Conference Presentation (August 2022)

27 slides from NIQ Global Intelligence's conference presentation, August 2022

  1. Slide 1: Optimization in an age of inflation

    Optimization in an age of inflation Navigating Disruption State of the U.S. Consumer August 2022 © 2022 Nielsen Consumer LLC. All Rights Reserved.

  2. Slide 2: Drivers of disruption are complex and map to longer-term shifts

    Drivers of disruption are complex and map to longer-term shifts And will be exacerbated with Ukraine crisis as effects will ripple longer term Market pressures impacting inflation Rising costs of raw ingredients Rising costs of shipping Rising delivery volumes Rising costs of labor Underlying factor

  3. Slide 3: Consumer confidence decreased again in July, down 7.5 pts from year ago

    Consumer confidence decreased again in July versus last month, is down -7.5 pts from year ago Consumer Confidence Unemployment 0.0 pts (June '22 vs May '22) Unemployment 3.6% -2.3 pts is down 95.7 (June '22 vs YAGO) -2.7 pts July '22 vs June ‘22 Savings Rate +0.2 pts (May '22 vs Apr ‘22) Savings rat

  4. Slide 4: Top concerns for Americans

    Top 5 concerns for Americans 38% Rising Food Prices 22% Rising Gas Prices 21% Economic Downturn 20% COVID-19 Resurgence 16% Rising Cost of Utilities Source: NielsenIQ Consumer Outlook Survey June 2022 – US – Top 2 concerns combined 4 © 2022 Nielsen Consumer LLC. All Rights Reserved.

  5. Slide 5: Consumer pressures impacting spending power

    Consumer pressures impacting spending power Inflationary Rising Interest Rising Pressures Rates Gas Prices* Inflation*: +8.2% Household Debt +51% CPG: +9.0% $15.6 Trillion in ’21 Monthly increase Income: +5.9% +$1 Trillion of +$88/ car Net Loss Source: NielsenIQ. Total US xAOC 4 weeks ending April 3

  6. Slide 6: Rising gas prices are rerouting consumers

    Rising gas prices are rerouting consumers 34% Driving less 25% Shop online Impact 24% Shop closer to home of Rising Gas Prices Source: NielsenIQ, Total US Homescan Panel Views Survey May 2022 6 © 2022 Nielsen Consumer LLC. All Rights Reserved.

  7. Slide 7: YTD 2022 dollar growth is off to strong start

    YTD 2022 dollar growth is off to strong start Total CPG $ % Chg 11.9 7.3 But... 2.1 2.2 Growth is fueled by rising prices, with unit sales soft 2019 2020 2021 YTD 2022 Unit % Chg -0.2 +6.9 -3.5 -2.4 Source: NielsenIQ, Total US xAOC, YTD: 23 weeks to June 11, 2022 7 © 2022 Nielsen Consumer LLC. All R

  8. Slide 8: CPG prices continue to rise, now reaching 10%

    CPG prices continue to rise, now reaching 10% Total CPG: Inflation Trend 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Q1 '19 Q2 '19 Q1 '20 Q2 '20 Q1 '21 Q1 '22 Q2 '21 Q4 '20 Q3 '81 Q4 '18 Q4 '19 Q4 '21 Q3 '20 Q3 '19 Q3 '21 Q2 '22* Source: NielsenIQ, Total US xAOC, – Average Unit Price Change * Q2 ‘22 Preview: 10 w

  9. Slide 9: CPG inflation primarily driven by food departments

    CPG inflation primarily driven by food departments Q2 ’22* CPG Inflation Inflation Varies By Department Pet Care 19 +10% Dairy Household 13 15 Frozen 13 Dry Grocery 13 Meat 11 Regular Promoted Deli 10 Price Price Seafood 10 +9% +14% Baby Care Produce 9 9 Bakery 9 Health & Beauty 9 Alcohol 3 Tobacco

  10. Slide 10: Stagflation? As prices rise, most CPG departments report softness in volume

    Stagflation? As prices rise, the majority of CPG departments are reporting softness in volume sales Q2 ’22* CPG Inflation Inflation and Sales Growth $ Vol +10% Pet Care 19 +13 -5 Dairy 15 +14 0 Household 13 +5 -7 Frozen 13 +8 -4 Dry Grocery 13 +13 0 Meat 11 +9 -1 $ % Chg Vol % Chg Deli 10 +12 +1 Sea

  11. Slide 11: Majority of consumers are concerned about rising prices

    As expected, the majority of consumers are concerned about rising prices Q: How concerned would you be if prices Level of Concern were to increase for everyday items over the next 12 months? 45% Extremely 26% Very Yes: 97% 20% 6% Somewhat A Little Source: NielsenIQ, Total US Homescan Panel Views Sur

  12. Slide 12: Consumers would prefer a larger size option to deal with rising prices

    Given the choice, consumers would prefer a larger size option to deal with rising prices Q: 28% Offer economy size for lower cost of use If raw material cost rose substantially for 19% Maintain same product and quality and increase price manufacturer of food, 17% Use cheaper packing material househo

  13. Slide 13: While economic impacts of COVID soften, cautiousness in spend prevails

    While economic impacts of COVID soften, cautiousness in spend prevails Dec 2021 25% 16% 33% 18% 8% June 2022 17% 11% 42% 23% 7% Image placeholder Strugglers: Rebounders: Cautious: Not Unchanged: Thrivers: Saved Have suffered Experienced impacted Not impacted money and feel financial income or job fi

  14. Slide 14: More impacted = more price aware

    More impacted = more price aware 81% have changed the way they shop to manage expenses Strugglers Rebounders Cautious Unchanged Thrivers 91% 93% 83% 52% 76% Source: NielsenIQ 2022 Consumer Outlook Survey, December 2021. US Q. Which of the following best describes your normal weekly grocery spend com

  15. Slide 15: Consumers are implementing 4.6 strategies to save money

    On average, consumers are implementing 4.6* strategies to save money Q: Which of the following 50% Stock-up when on sale activities, if any, have you 42% Use coupons been doing to reduce your 38% Seek out stores with lower prices expenses? 37% Buy store brands 31% Only buy the essentials Top 10 28%

  16. Slide 16: Promotional sales lag regular priced sales

    Despite the new pressures on consumer wallets, promotional sales lag regular priced sales CPG: % Sold on Promotion YTD % Promo % Chg Alcohol 31.9% -1 Meat 31.8% +12 29.2 Seafood 29.7% -8 Dry Grocery 28.2% +4 25.5 24.4 Produce 27.4% +2 23.5 Health & Beauty 23.7% +8 Household 21.6% +11 Dairy 21.1% -4

  17. Slide 17: Private label has returned as a sales growth driver

    After a slight loss in share last year, private label has returned as a sales growth driver CPG: Private Label $ Share YTD $ Share % Chg Bakery 40.9% +13 Dairy 33.5% +13 Deli 26.0% +11 18.5 18.5 18.2 18.6 Household 26.0% +8 Frozen 23.9% +5 Meat 22.0% +12 Health & Beauty 16.4% +3 Produce 15.7% +14 $

  18. Slide 18: Navigating the change provides unique growth opportunities

    Navigating the change provides unique growth opportunities The most economical offer will hold appeal but will appreciate brands Strugglers who can bring excitement or relieve daily pressures. Recovering from financial insecurity they remain cost-conscious. They will attempt Rebounders to embrace th

  19. Slide 19: What does the remainder of 2022 and beyond look like?

    What does the remainder of 2022 and beyond look like? Is a recession on the horizon? 19 © 2021 Nielsen Consumer LLC. All Rights Reserved.

  20. Slide 20: Recessionary times are already here for majority of Americans

    Recessionary times are already here for majority of Americans Q. Do you think your country is in a recession at the moment? 20% 23% 23% Don’t know While the circumstances of 2022 21% are not comparable, 24% 24% history shows just how high the recessionary No sentiment could go 59% 54% 53% % Yes 2008

  21. Slide 21: Most Americans fear disruption and uncertainty will continue beyond 2022

    Most Americans fear disruption and uncertainty will continue beyond 2022 – especially economic hardship Q. When do you the U.S. will be free from the following disruptions Don't know 25% 24% 25% 31% 2023+ 47% 59% 53% 45% 2022 12% Already is 8% 12% 13% 17% 10% 9% 10% COVID-19 Economic hardship e.g Su

  22. Slide 22: Declining confidence stemming from growing insecurity

    Declining confidence stemming from growing insecurity Americans are feeling less secure about economy, income and ability to meet daily expenses Q. How secure do you feel in the next 6 months compare to today? 7% 9% 5% 12% 7% 12% 25% 29% 32% Economic Household Able to meet daily Stability Income lev

  23. Slide 23: Grocery spend is expected to increase as consumers shift back into the home

    Grocery spend is expected to increase as consumers shift their spending and eating occasions back into the home Future Spending Intentions Spend Less Spend Same Spend More NA Groceries 17% 42% 40% 1% Take-out/Delivery 29% 35% 12% 14% Dining Out 42% 37% 14% 8% OOH Entertainment 46% 29% 9% 16% Source:

  24. Slide 24: How Could a Recession Be Different Now?

    How Could a Recession Be Different Now? When the economy overheats this is a precursor to a recession…usually ▪ Overheating means demand is outpacing supply ▪ Two things must happen for the economy to “overheat” ✓ Rising inflation Homes for Sale Comparison ✓ Unemployment below its “natural” rate ▪ E

  25. Slide 25: Shopping behavior has changed

    Shopping behavior has changed 1. Prioritize different attributes 2. Adjusting to manage grocery expenses 3. Shifting to online purchases 4. Shifting to private label 5. Focus on necessities 25 © 2022 Nielsen Consumer LLC. All Rights Reserved.

  26. Slide 26: It All Starts with a Price Increase

    It All Starts with a Price Increase Manufacturer Feature price Regular price increases price does not increase Retailer needs to goes up drive store traffic Price & promotion dynamics Bandwidth Pressure on Percent on Support between regular manufacturer to deal increases and promo price increase tra

  27. Slide 27: For more insights:

    For more insights: niq.com/global/en/insights/ About NielsenIQ NielsenIQ, a global About information NielsenIQ services company, delivers the gold standard in consumer and retail measurement, through the most connected, complete, and actionableArthur C. Nielsen, understanding ofwho founded global, t

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