The majority of retailers and consumer goods manufacturers have high expectations for their business growth beginning this holiday season and going into 2025, according to the Q4 Advantage Outlook, an industry-leading survey of senior-level executives’ expectations at leading retailers and consumer products companies across the U.S.
More than 85% of retailers expect to see unit volume growth in their individual business in 2025, while 80% of surveyed manufacturers anticipate unit volume growth, mostly in the 1% to 4% growth range.
For retailers, enhanced promotions will drive growth, along with increased reliance on private brands and everyday pricing.
“Our analysis suggests an acceleration on promotional activity across channels from last year, with trends almost returning to pre-COVID levels,” says Nico Cattaneo, senior vice president of analytics and operations at Advantage Solutions, which published the report.
Manufacturers anticipate growth from expanded distribution and product innovation. Food manufacturers will rely on distribution and innovation, while non-food manufacturers will lean on e-commerce and brand marketing.
And optimism abounds for a happy holiday season this year: More than 70% of retailers expect unit volume growth and about half of manufacturers predict unit volume growth.
“Drivers for holiday growth are pretty much the same as those for the year ahead.
Manufacturers cite expanded distribution and more promotions, while retailers are looking to more promotions and private brands to grow unit volume,” Cattaneo says.
This is where Advantage can step in and help with a wide array of solutions for brands and retailers.
“Led by insights, we help our clients grow distribution, launch successful innovation and optimize promotional spend,” Cattaneo says.
With shoppers continuing to seek value, retailers and manufacturers are taking different approaches to providing it. Manufacturers will focus on multiples and reduced prices while retailers will focus on loyalty program deals and private brands. When it comes to next year’s promotion strategies, manufacturers will focus evenly on depth of discount and frequency, while more than 90% of retailers will focus on depth of discount.
“For private brands, the reasons expand beyond value to meet different needs and desires for shoppers, such as wellness attributes and seasonal flavors,” says Jean Ryan, vice president of strategic advisory at Daymon, which powers private brand development for Advantage Solutions.
Here are more takeaways from the Q4 Advantage Outlook:
- Driving trips. Loyalty programs and digital coupons are the top retailer strategies for driving trips to the store, each with 44% of retailers. Private brands are close behind and growing, with 39% of retailers.
- Price changes. About a third of manufacturers plan on adjusting prices over the next six months, expecting price increases on select items.
- Shrinkflation is on its way out. Manufacturers plan to expand distribution with large pack-size retailers as well as adjusting pricing across sizes and channels in 2025.
- Competing with private brands. As private brands continue to grow and be seen as established brands, manufacturers will heavily rely on marketing the value of their brands.
The Advantage Outlook is published quarterly and produced in collaboration with NielsenIQ, as well as a select number of national and regional retailers and manufacturers. Click here to download your free copy of the Advantage Outlook Q4 2024 report.
