Analyst sees no holiday respite for price pressured processors

Market information group TNS says that while food sales have stayed resilient over the year due to their higher pricing, increased costs for the products are leading to flat and even declining demand during the final three months of 2008.

The comments follow the publication of TNS’ Retail Forward Forecast that expects sales growth over this year’s holiday period to be 1.5 per cent, narrowly ahead of the 1.2 per cent recorded in 1991.

TNS senior economist Frank Badillo told FoodNavigator-USA.com that the general economic downturn was creating a falloff in demand for all types of food products as price pressures continue to remain high.

“In response, demand for food products will be tempered by somewhat higher than average food price inflation going forward,” ​he stated.

Badillo claimed that sales across all segments of the food industry were expected to be weak over the period, particularly for higher priced products marketed as more ‘luxury’ goods.

“That’s among the first places shoppers are looking to cut back in response to tough times,”​ he added.

Emerging opportunities​

In looking at the findings, Badilo said that growth opportunities may exist for private label goods, which were becoming an increasingly viable alternative in low-income households.

However, TNS claimed that despite these difficulties, not all consumers would be willing to make this trade, as families with higher incomes were expected to remain more loyal to brands.

Badilo said that these same families may be more willing to trade down to value formats to purchase the same products at a lower price though.

Data compilation​

TNS says that the findings from its holiday period Retail Forward Forecasts uses historical data from the US Department of Commerce, combined with the group’s own monthly Shopperscape survey and industry knowledge.