Forecasting the Future: Speaks 2005 Retail Scenarios

Imagine how easy business would be if we knew exactly what the future was going to bring. We'd have all the answers to consumer trends, competitive challenges, hot fads and...well, everything. It wouldn't be fun, but it would be easy.

Of course, it's not going to happen either. All we can do is look at what we know today and project forward what is likely. That way we can think about what responses would be most appropriate even though we know the future is likely to turn out very differently than we expect.

With an eye toward that understanding, FMI's annual state of the industry review, Speaks 2005, posed a series of potential scenarios and asked retailers to project how soon, if ever, they would come to pass. Here, in order, are the predictions they made (for a more detailed description of just what our retail insiders have to say, read the article Speaks 2005 Retail Scenarios in this month's issue).

High fat/high calorie foods will carry warning labels. Nearly 50% see this happening in the next five years and almost 90% say this will happen over the next decade.

Large chains will spin off divisions and get smaller. More than one-third of respondents see this happening in the next five years.

All products will carry country of origin information. Fewer than 30% see this happening in the next five years, but 82% say it will happen by 2015.

Credit and debit cards will account for 90% of sales. Only 25.5% see this happening over the next five years, but over the next decade, more than 85% of retailers say this will happen.

SKU counts will decline significantly. Twenty-two percent of retailers say SKU counts will decline significantly during the next five years, and 45% overall say it will happen by 2015.

For more on these predictions along with FMI's full report of current industry performance, look for Speaks 2005 at www.fmi.org through the FMI store.

Light Reading - Raising the Profile of the Lowly Food Label

Consider food labels. Just like the many appliance owners manuals people have stored in a drawer somewhere, relatively few people bother to read them. Yet they represent a tremendous opportunity for the CPG industry.

ACNielsen's recent global study on food labels revealed that on average, only 2 in 10 consumers in Europe, North America and Asia always check nutritional labels. The most avid readers are in Latin America where 3 in 10 shoppers always check labels.

Across all 38 markets included in the study, it appears that labels do affect trial, with four in ten consumers always reading labels before trying a new product, indicating that labels can heavily influence whether a new product is purchased or simply returned to the shelf. Consequently, it is in the manufacturer's best interest to help consumers interpret the information on food labels to make sure they find what they need.

Needs vary. Globally ( The Nutrition-Conscious Global Shopper) , approximately 49% of consumers regularly check labels for fat content, while 43% look for caloric content. Another 42% look for sugar content and 40% are interested in preservatives, according to ACNielsen's study, which also found that only 11% regularly check labels for the glycemic index.

In the U.S. ( Fat Content of Most Concern to U.S. Consumers When Shopping for Food, According to ACNielsen) , 56% of shoppers regularly check the fat content of the foods they buy. Despite all of the hype around carbohydrates, just 40% of U.S. consumers regularly check a product's carb count. Globally, just 28% do so.

Would more consumers read labels if they better understood what the information means to their family's health? Very likely, the answer is yes. People have a sincere desire to improve health and prevent disease. CPG manufacturers can enable them to achieve these goals not only with concise information, but by helping them understand what the information means. The long-term benefits will be a more loyal consumer and possibly stronger sales of both new and existing products.