• Home
  • >
  • Inflation
  • Analysis: Changing Pack Sizes Can Aid Grocers Amid Inflation

Analysis: Changing Pack Sizes Can Aid Grocers Amid Inflation

As many shoppers trade down brands in the wake of rising inflation these days, what retailers need to do to attract these customers differs based on their usual value proposition.

Different retailers offer different benefits, whether great experiences, low average prices or great value on bulk purchases, and companies can work with manufacturers to make the most of each approach.

One of the first places consumers cut back is dining out – which presents an opportunity for retailers and manufacturers to help them recreate outside dining experiences in their homes.

At-Home Options Attractive as Ever

Ray Florio, Partner, Growth Consulting at IRI, presented the example of the café — if brands and retailers can work together to market the ingredients for a popular drink that can be replicated cheaper at home, they can grab the interest of cash-strapped shoppers.

Marketing these attributes is one way of achieving this goal, but grocers and manufacturers also can work together to create real-life experiences that show shoppers how easy it can be. They even have an existing model to follow.

“Think about actually having that manufacturer work with you to set up some actual in-store lessons on how to create that beverage firsthand,” said Florio. “Think Costco and how it traditionally has those tasting sessions and free samples. What if you actually use the free sample to recreate the beverage that they’re recommending as well?

“Those are some examples of how you can put that into action in a way that can be highly appealing for shoppers who are feeling the squeeze and looking to cut back.”

Time for Re-sizing

Changing packaging sizes is also a great way to drive sales during a tough economic environment.

That can mean both smaller, cheaper sizes or bigger, more expensive but more cost-efficient options, according to Florio. The key is for the retailer and the manufacturer to match the product to the audience.

“The biggest thing that happens during one of these periods is you find that the different types of retailers become more polarized in the purpose they serve,” said Florio. “The mass and the club are even more set up for, ‘What is that bulk discount? How do I give that price volume advantage?’ Grocery tends to still be more about trialing and experiencing new things. Your dollar type of channel becomes more about, ‘How do I get the low overall ticket ring?’”

Grocers who tend to focus on big stock-ups and great deals, mimicking the value proposition of Walmart, will benefit from bigger price advantages with larger volume packages. Off-price retailers should look into finding the cheapest available options.

Florio noted that cold and cough medicine tends to come in packs of 24 or 30 pills, while symptoms usually last a week. A seven-pack of medicine could generate a price point that feels at home in the dollar channel, getting brands in front of a new audience and giving grocers a new product offering.