New survey shows labor shortages and inflationary pressures are top concerns among the largest U.S. retailers and consumer goods manufacturers
August 16 2023 - 9:00AM
Advantage Solutions Inc. (NASDAQ: ADV) today unveiled the findings
from its Advantage Outlook, a quarterly survey fielded in June and
July 2023 that includes responses from senior-level executives at
dozens of the leading retailers and consumer products companies
across the U.S.
The survey results reveal that product manufacturers are no
longer attempting to innovate on lower-price-point products to
compete on value. Instead, nearly all manufacturers — 98% — are
investing in innovation on mainstream or premium-priced products
with a heavy emphasis on health and wellness, and products that
offer in- and at-home indulgences.
The Advantage Outlook details a rapidly evolving retail
landscape and a challenging operating environment for consumer
goods companies and retailers, as persistent inflation and labor
shortages continue to affect business operations. While consumer
confidence remains high, challenges with in-store labor and other
factors are leading to sweeping changes in retail strategy.
“The Advantage Outlook found that facing continued labor
challenges and rising costs, manufacturers and retailers are making
substantial changes to ensure shoppers have an optimal in-store
experience and can find and purchase the products they need,” said
Dave Peacock, CEO of Advanced Solutions. In response, manufacturers
and retailers are investing in technology and timely promotions and
evolving how they approach innovation. They have a clear focus on
high-end products that offer consumers premium experiences, health
benefits and at-home indulgences.”
Additional findings from the Q2 Advantage Outlook include:
- Product innovation getting a high-end
makeover: Despite persistent inflation and price-sensitive
consumers, manufacturers are focusing their innovation investments
on premium-priced products with a heavy focus on health and
wellness and in- and at-home indulgences. Meanwhile, retailers are
hungry for more innovative products to spur sales, with 72% saying
they expect to accept more innovation over the next six months and
95% indicating they will accept new item cut-ins outside of
traditional reset windows.
- Most manufacturers are no longer raising prices to
combat inflation: Sensing increasing price sensitivity
among consumers, manufacturers no longer are raising list prices to
combat inflation. Instead, they’re focusing efforts on disputing
retailer fines and fees. Ninety-six percent of manufacturers say
that disputing fines and fees remains their top strategy to address
increased costs; less than one-third anticipate raising list
prices.
- Labor shortage leading to more self-checkout:
Manufacturers and retailers agree that in-store labor is a critical
issue that requires a new and immediate approach. Retailers plan to
increase self-checkout options to address labor shortages, while
manufacturers say those shortages and a lack of planogram oversight
are the top two factors affecting on-shelf availability.
- Expect more reliance on promotions to drive
sales: Manufacturers and retailers will focus on increased
promotions to drive unit sales, with some retailers looking to zero
in on major holidays, their rewards programs, club-pack sizes and
extended promotion periods.
“The results of this quarter’s Advantage Outlook underscore that
Advantage’s services are needed now more than ever to help
manufacturers and retailers work hand-in-hand to connect people
with experiences and products that enrich their lives,” Peacock
said.
With relationships with more than 4,000 consumer goods companies
and most of the largest U.S. retailers, Advantage sits at the
intersection of brand and retail with extensive reach and a breadth
of services that help convert shoppers into buyers.
"Manufacturers and retailers are looking to do more with less in
today’s operating environment while holding fast on price and
ensuring product availability,” said Jill Blanchard, president of
enterprise client solutions at Advantage Solutions. “Manufacturers
are revamping their offerings with a focus on premium products, and
retailers are ready to embrace a wave of innovation to meet
evolving consumer demand and convert shoppers into buyers."
About Advantage OutlookThe Q2 Advantage Outlook
is a quarterly survey of the world's largest consumer goods
manufacturers and retailers published by Advantage Solutions in
partnership with Nielsen IQ. The survey was conducted between June
14 and July 6, 2023, and included two surveys with 60 respondents
representing consumer goods manufacturers and 43 representing
retailers.
To access the complete findings and methodology, please visit
https://advantagesolutions.net/advantage-outlook/.
About Advantage Solutions
Advantage Solutions is a leading provider of outsourced sales
and marketing solutions to consumer goods companies and retailers.
Our data- and technology-driven services — which include
headquarter sales, retail merchandising, in-store and online
sampling, digital commerce, omnichannel marketing, retail media and
others — help brands and retailers of all sizes get products into
the hands of consumers, wherever they shop. As a trusted partner
and problem solver, we help our clients sell more while spending
less. Headquartered in Irvine, California, we have offices
throughout North America and strategic investments in select
markets throughout Africa, Asia, Australia and Europe, through
which we serve the global needs of multinational, regional and
local manufacturers. For more information, visit
www.advantagesolutions.net.
Peter Frostpress@advantagesolutions.net
Advantage Solutions (NASDAQ:ADV)
Historical Stock Chart
From Jun 2024 to Jul 2024
Advantage Solutions (NASDAQ:ADV)
Historical Stock Chart
From Jul 2023 to Jul 2024