Grocery Manufacturers, Retailers Predict Sales Growth Amid Rising Costs and Supply Chain Challenges, Advantage Sales Reports

Rhea-AI Summary

Advantage Sales Outlook October 2021 reveals that grocery manufacturers and retailers anticipate sales growth despite rising costs and supply chain issues. According to the report, 60% of manufacturers and 70% of retailers expect higher sales in Q4 2021. Price increases are seen as the primary driver of growth, with 90% of manufacturers planning hikes since the pandemic. Digital investments are increasing, with over half of retailers expanding fresh offerings. However, manufacturers express greater optimism about supply levels compared to retailers.

Positive

• 60% of manufacturers and 70% of retailers expect increased sales in Q4 2021.
• 90% of manufacturers plan to implement price increases due to rising costs.
• Over half of retailers plan to expand fresh category offerings.

Negative

• Retailers are less optimistic about supply levels than manufacturers, which could indicate ongoing supply chain challenges.
• 70% of manufacturers plan to reduce traditional trade spending in the next six months due to supply constraints and cost increases.

“Advantage Sales Outlook October 2021” finds brands and retailers are rethinking their pricing, supply, new item and trade promotion strategies

IRVINE, Calif., Oct. 25, 2021 (GLOBE NEWSWIRE) -- Closing out the year and looking ahead to the first quarter of 2022, grocery manufacturers and retailers are predicting continued dollar sales growth as they navigate rising costs and supply chain challenges, make changes to in-store space allocation and focus on investments in digital commerce, according to “Advantage Sales Outlook October 2021” based on two new surveys by Advantage Sales, a division of Advantage Solutions.

Among the report’s findings are:

• Six in 10 manufacturers and seven in 10 retailers expect higher dollar sales in the fourth quarter of 2021 compared to a year ago. Manufacturers and retailers agree price increases will be the top driver of dollar sales growth.
• Outside of price increases, more manufacturers than retailers say improved supply will drive growth. Retailers point to elevated levels of in-home consumption and increased consumer spending.
• To mitigate rising costs, nine in 10 manufacturers are planning or have taken at least one price increase since the pandemic started. One half have taken one increase. One-fourth are planning or have taken a second. Nearly one-sixth are planning or have taken three or more. Most price increases have been reflected in list price.
• Manufacturers are more optimistic than retailers about supply levels. While one-third of manufacturers expect supply levels to top 90% in the last quarter of 2021, none of the surveyed retailers do.
• More than half of retailers are expanding their fresh category offering. Four in 10 plan to trim space devoted to tobacco and general merchandise.
• Manufacturers say retailers that are winning online are leveraging new shopper fulfillment options, are focusing on online shopper experience and services, and have a retail media network. Nearly all retailers surveyed say they have increased their digital investments this year compared to 2019.
• Seven in 10 manufacturers plan to reduce traditional trade spending in the next six months. Their top reasons include supply constraints, diverting funds to digital investments and cost increases.
  

“Advantage Sales Outlook October 2021” is based on responses by 79 consumer packaged goods manufacturers and 36 grocery retailers to online surveys conducted September 13 through September 23, 2021 by SMARTeam, Advantage Sales’ consumer packaged goods research and insights team.

Download the full report or visit advantagesolutions.net/newsroom.

About Advantage Solutions

Advantage Solutions is a leading business solutions provider committed to driving growth for consumer goods manufacturers and retailers through winning insights and execution. Advantage’s data and technology-enabled omnichannel solutions — including sales, retail merchandising, business intelligence, digital commerce and a full suite of marketing services — help brands and retailers across a broad range of channels drive consumer demand, increase sales and achieve operating efficiencies.

Headquartered in Irvine, California, Advantage has offices throughout North America and strategic investments in select markets throughout Africa, Asia, Australia and Europe through which it services the global needs of multinational, regional and local manufacturers. For more information, please visit advantagesolutions.net.

Contact

Will Minton
Vice President, Corporate Marketing & Communications
Advantage Solutions
press@advantagesolutions.net

FAQ

What does the Advantage Sales Outlook October 2021 report indicate about sales trends for ADV?

The report indicates that 60% of manufacturers and 70% of retailers expect higher dollar sales in Q4 2021 compared to the previous year.

How are manufacturers responding to rising costs according to the Advantage Sales Outlook?

90% of manufacturers are planning or have implemented at least one price increase since the pandemic began.

What strategies are retailers focusing on as per the Advantage Sales Outlook October 2021?

Retailers are increasing their digital investments and expanding their fresh category offerings.

What challenges are highlighted in the Advantage Sales Outlook regarding supply levels?

The report shows that manufacturers are more optimistic about supply levels than retailers, indicating potential supply chain challenges.

What impact will reduced traditional trade spending have on manufacturers as suggested by the report?

70% of manufacturers plan to cut traditional trade spending, mainly due to cost increases and supply constraints.