Kantar-通货膨胀上升了-必须下降什么？（英）-

Inflationsgone

up–Whatmust

comedown?

WorldpanelDivision

MiddleEast

May2022

TheAgenda

1

ImpactofGlobalSituation

onKSAandUAE

2

Inflationcopingstrategies

fromthepast

3

ExpectationsforFuture

Inflationarybehaviours

2017

2018

2019

2020

2021

2022

TheGlobalPicture:Inthelastfiveyears,concernoverinflationhasgrown

–in2021Globalinflationhititshighestrateinyears

ThisisonlysettorisefurtherduetotheRussia-Ukrainewar

GoogleSearchesforInflation:(Worldwide)

Source:

/statistics/256598/global-inflation-rate-compared-to-previous-year/

3

4

“

“

”

”

RecentconflictwillaccelerateInflation–withbothbeingasuppliersof

energyandwellasrawmaterialsinparticularsupplyanddemandacrossindustriesissettogetaffected

4.35%

FMCGmakerstogoforaround10%pricehiketomitigateinflationarypressures

…FMCGcompaniesmullinganotherroundofpricehiketooffsettheimpactofanunprecedentedlevelofinflationincommoditypricessuchaswheat,palmoilandpackagingmaterials.

EconomicTimes,10thMarch2022

HowthewarinUkrainewillfuelasharphikeininflation

…amountedtothe“dawnofanewworldorder”fortheinternationaleconomy,inwhichhigherinflationandfinancialmarketvolatilitycouldbetakenasgiven.

…nowpricinginthelikelihoodofglobalgrowthbeing0.5%pointsweakerthanfirstexpectedduetotheconflict,asrisingenergypricesdepressproductionandsqueezeconsumption.

TheGuardian,25thFeb2022

“lrcthwSrd0ecasGDP2pptfsreFnacn2isns0doe2.pto

”

,21stMarch2022

13.9

5.7

4.5

6.3

7.1

7.1

3.4

3.2

2.2

2

2

6.5

7.6

6.3

5.6

2

2.4

1.1

2.1

3.2

3

3

3

0.6

6.4

4.5

2.6

2

0.2

0.6

1.4

1.2

1.6

1.8

0.7

0.4

1.6

2

2.5

2.5

0.1

3

2.7

2.6

2.6

2

2.2

2.1

2

1

1

2.7

2.7

2.6

2.5

3.2

2.4

2.5

-2.1

-0.2

-0.9

-1.9

-2.1

-2.3

-0.7

-2.7

MENACountries

“

SeniorCorporateBankingExecutivefromDubai-basedMashreq”

“t.ttt-

EmiratesNBD

Riseininflationwasalsoalreadyfront

ofmindinourregions

201920202021202220232024

”

Egypt

Kuwait

Iraq

Algeria

Jordan

Oman

Bahrain

Qatar

KSA

UAE

Morocco

InternationalMonetaryFund

5

/external/datamapper/PCPIPCH@WEO/WEOWORLD/BHR/ARE/SAU/KWT/MAR/IRQ/JOR/OMN/DZA/EGY/QAT

/business/comment/2022/02/07/uae-not-as-affected-by-inflationary-pressures-as-some-developed-

economies/#:~:text=Emirates%20NBD%20expects%20inflation%20in,cent%20over%20the%20whole%20year

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

KSA,priceincreasesarenotnew-theeconomyhadbeenbouncing

back,consumerdemandandconfidencerisingwithinflationlevelnowsimilarto2018

TransportationhasconsistentlycontributedtohigherCPIbutfood(*10%surgeinvegetablecost)hasalsobecomeafactor

AnnualPercentChange

Whyisinflation

increasingnow?

⎻Asurgeindemand

forgoods

⎻Globalsupplychaindisruptions(Staffshortages)

⎻Risingenergyprices

⎻Costofimporting

goods

INFLATION

GDP

Jan2018

5%VATincrease

14

HighestInflation+

highoilprice

SugarTax

9

July2020

15%VATincrease

4

-1

-6

CPI:ConsumerPriceIndex

/saudi-arabia/inflation-cpi

/saudi-arabia/gdp

6

Consumers

Inflationcoping

strategiesfrom

thepast

8

Howmuchtheyspend

SpendperItem/Pack

B.PayLess

Shoppershavetwo‘copingstrategies’

Wecanlookbackatmomentsintimewherepricesincreased.So,whatarethewaysinwhichshopper’shavemanagedspend?Whatcanmanufacturersdotoutilisethisinsight?

A.BuyLess

…wequantifybehaviour,andtrackitovertime…

SAR

Howmuchtheybuy

Items/Packs

1.ReduceVolume?

2.Stopbuying?

3.BuylessOften?

4.Cheaperchannel?

5.Cheaperproducts?

6.Morepromotions?

9

Aspressuresaccumulates,everypossiblewayofrationalisationwillbe

adoptedtomanagedisposableincome

SlowdownowingtoslumpinOilprices+ExpatLevy

Q217Drinks&Tobaccotax

COVID19PandemicBegins

H22020

5→15%

VATincrease

DecreasedOil

Pricesduetoglobaleconomicheadwinds

Saudization

leadingto

growthin

ModernTrade

RussiaUkraineWar

Q1180→5%VAT

Recoverysigns

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

20182019202020212022

Inflationsettoincreasedueto

-Increaseddemandforgoods

-Globalsupplychaindisruptions(Staffshortage)

-Risingenergyprices

-Costofimporting

-RussiaUkraineWar

10

Inflation

2022

Recently,increaseshavebeendealtwithinasimilarfashionwithall

‘copingstrategies’beingdisplayed–Rationalisation,cheaperassortment,andchannelareconsistent

ImportanceofModernTrade,Promotionshavebeengrowingconsistentlyoverthelastfewyears

2008

Inflation

4.1→9.9%

2009

CSD+50%

(inflation9.9%)

2016

Economic

Slowdown

(inflation+2.1%)

2017

VAT0-5%

(inflation

0.8→+2.5%)

2017

SugarTax

+50%CSD

2020

VAT

5-15%

Reduce

Volume

Vol/volptrip

BuyLess

Often

StopBuying

Cheaper

Channel

More

Promotion

Cheaper

Products

Expectationsfor

FutureInflationary

behaviours

12

Shoppersarealreadymanagingbudgetsbutthisissettocontinue

RestrictionsoverthelasttwoyearsmeanshoppershavelearnedtoworkwithfewertripsandfindingvalueinModernTradestoresofferingeverything

ReduceVolume

Spendsincreasebutvolumesdown–

continuingthecurrenttrend

MorePromotions

Willcontinuetoseekpromo.Asallbrandspush

promo,Shoppersexpectedtolookforfurther

value.

Whatisvaluablepromosforshoppers?

HowfarcanweincreasePromo?

Shoppinglessoften

VisitinglessoftenmeansheaviertripsExpect

anefforttobalanceoutlay

Choosingcheaper

Cheaperbrandsorbetteroffersforreducing

outlay…

Shoppersneedtoseethesignificant

differentiationtochooseotherwise

Stopbuying

Rationalizationalreadypracticedbyallbuyergroups–Givingareasontobuyiscriticalplusworkingonanyexistingbarriers

CheaperChannels

ModernTradebecomingmostcostsavingoption.Astrafficexpectedtogrow,reasontochooseonevsotherexpectedtochangeConsiderationofvaluedpromos,assortment,storeexperiencebecomesmoresignificant

13

Change

repertoireof

sub

categories

More/LessPromotions

Cheaper

brand/PLvs.

Brandratio

RepeatBuyerBehaviour

Changevolumepurchased(more/less)

Changetotal

volume

purchased

ChangestoreChoice

Buycheaper/moreexpensiveproducts

ProductMix

(subcategories,packsizes)

Inflation

exposure

Thesedifferentcopingstrategiesareutilisedaccordingtobudgetandcategory

Changeincategoryspend(+/ve)

New/LostBuyers

MovingtoAdjacentCategories

14

Differentcategorieshavedifferentimpactlevels

High

Impact

⎼

⎼

⎼

⎼

⎼

⎼

⎼

⎼

⎼

⎼

⎼

PowderConcentrates

PuffsandSandwichesEnergyDrinks

RTDMaltBeveragesUHTFlavouredMilkFreshFlavouredMilkGhee

HairCreams

HairRemovalSpecialtyCleanersAirFreshener

ModerateImpact

⎼

⎼

⎼

⎼

⎼

⎼

⎼

⎼

⎼

⎼

⎼

⎼

⎼

Disinfectants/Ant

Chocolates

Biscuits

Jam

Pasta

Tea

CarbonatedSoftdrinksLiquidConcentratesYoghurt

FabricSofteners

CoffeeCreamer

EdibleOil

Bleach

Low

Impact

⎼

⎼

⎼

⎼

⎼

⎼

⎼

⎼

⎼

BottledWaterCoffee

UHTPlainMilkCheeseDryTissuesHandDishwashShampooToothpasteLaundry

*Caveat–Forthisassessmentwehavealsoconsidered3factors,aslistedbelow:

-Penetrationlevels(assumingthatannualpenetration<50%hashigherrisk,50%-79%mediumrisk&>=80%islowerrisk)

-WelookedatgrowthrateversusTotalin19/20,20/21

-Wefinallyalsolookedatthe3yearvolumeCAGR(consideringtherevivalofcategoriespostdecline)

#POV

Whatmarketeers

shouldbethinking

about

16

Price/Pack:Pricesgoingup,butwhatdoweneedtothinkabout

toensureit’sourbrandtobepickedup?

PackSize

PacksizeRatiobyChannels

Beingfreshisnolongerabarrierforthesefrequentcategoriestobesoldinbulk.However,withallcategoriesathresholdwillbereachedasshopperslooktobalanceoutlay.

Dependentfactorsincludefrequency,perishability,outlay,channelalignment,andSECcatchment.

Pricing

SpendOutlay

Scaleofinflationisnewterritory.Pre2020VATandduringCovidshoppersstockedupbutovertimefocusshiftstowhatwas‘normallyspent’andworkingwithinthislimit.

HighOutlay/Premium/Nonessentialshavebenefitedfromofferingsmallerpackstokeepshoppersfromfeelingliketheyaremissingout.Tokeepshoppersinthecategories,offeringinlowertierscanalsobeconsidered.

17

Price/Pack:Examplesofbrandsadaptingtothechangingneeds

whenpricesrise

PackAssortment

CocaColareducedpacksizeto

manageOutlay

Postsugartax,Coca-Colasawsuccessbymovingtoasmallerpacksizeoffering.Bothinsmallercans175–150mlandofferingsmallerbundles,givingshoppersacheaperoptionandkeepingtheminthebrandandinthecategory–evenbettertheydiditsoonerthanrivalPepsi.

Brandmaintainingbothlargest&

smallestpackstoaccommodatesmalleroutlay

Laban,averyhighfrequencycategorylauncheda2.85Lpack.Overtimethe1Lgrewto2Landnowevenlarger.Suitingthealternateoccasionsofdifferentshoppers,differentchannelsgrowingbaskets,differentoutlaythresholds.

AlmaraifullFatyoghurtrangereachesfrom170-1,2,4,10Kgs.

PriceAssortment

MilkPowderBrandsmaintainingshoppersabletospendaswell

NestleandAnchorofferedshoppersacheaperalternativewhenthetypicallyhighoutlayproductgrewexpensive.

BrandsneedtounderstandwheretheysitintheEconomy,Mass,Premiumspectrumandseehowfartheycanstretch.Anchorisabrandthathasmanagedtospanallareas.

18

Place:Withshoppersvisitingstoreslessoften,weneedtodrive

mentalandphysicalavailability

MultipleChannels&Growing

Channels

Weneedtobeinthestoresshoppersarevisitingspecifictoyourcategory.Thisdoesn’tonlymeanModernTrade…topupmissionsareunlikelytogoaway.

Lookforthegrowingchannels,thosecheaperchannelsandecommerce.

StandOut

POS,Visibility&Multipletouchpointsinstore,ShareofShelves,StoreexperienceimportantinModernTrade

Product:InnovationsneedtobeMeaningfulandDifferent

Manufacturersneedtohighlightvalueoftheinnovations,howwillthesebenefittheshopperslives

FrieslandCampina’s

moresustainableandre-

closableproduct(major

innovation)made

shoppersliveseasierand

changedthewayitwas

utilized.

Alkbouswasn’ttheonly

brandduringCovidtotap

intothepopulations

increasingconcern

regardingimmunity.

Boththeseconceptsareaddingvaluefortheshopper

19

#POV

Supply&Supplychain

issuesbecomesabarrier

forCheaper&Smaller

players…

Mainstreambrandsto

benefitwithsharegains…

evenbetterifwebuildon

ourEquity

People/Proposition

Resonatingwithconsumers

Communicationhastobeaboutmakingtheir

liveseasierandshowingthatyourbrandis

awareofthestrugglestheymayface.

Drivingequityisimportant.Duringtoughtimes,brandsthatresonate/havehigherequityexcel.

New/evolvingoccasions

Partofresonatingisidentifyinganunmetneedand/oraddingvalue,ortappingintothenewoccasionsbornthroughreducedbudget.InhomeoccasionsduringCoviddrovesuccessformanybrands.

Howwillshopperschangelifestyletocost

save?Fridaynightsin,Coffeesinhome?Meal

kits…Movetolunchboxfrombuyingonthego?

54%

Communicatingtoyour

consumers

ReturnonAdspendhasincreased.Brandsaregettingmoreefficientattargetingcurrentconsumersaswellasmoreviablepotentialones.

SocialMediahasmadethiseasierthanever.Whilstcuttingspendmaybetempting,brandsneedtothinkabouttheconsequenceofnotcommunicatingatthistime.

Sources:

[1]“Post–pandemicGroceryAdvertising–Sho