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McKinsey Insights & Publications

2024-02-16 00:00:00

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Summary

Amid a relatively strong economy and low unemployment, consumers are buying fewer items, spending more to do so, and shifting their behaviors in small but meaningful ways. Reasons for this shift include increased prices, changes in behavior among specific consumer segments (like Gen Zers), and shifts away from traditional brick-and-mortar channels toward online and value channels. Consumer packaged goods (CPG) businesses should take action to hedge against continuing consumer purchase behavior trends, including evaluating their product portfolio, accelerating their investment in growing channels, reconsidering pricing and promotion strategies, continuing to invest in brand loyalty, and calibrating their supply chain to demand.

Key Themes

1. Consumer Behavior Shift:
The article highlights shifts in consumer purchase behavior in response to increased prices, particularly among Gen Z consumers, and the movement away from traditional brick-and-mortar channels to more online and value channels.
2. Consumer Packaged Goods (CPG) Volume Declines:
The text discusses the reasons for the recent declines in the volume of consumer packaged goods, including lower purchasing frequency and unit declines across various categories of goods.
3. Strategies for Businesses:
The article outlines five strategies that CPG players can undertake to combat volume declines, including evaluation of product portfolios, accelerating growth in specific channels, reconsidering pricing and promotion strategies, continuing to invest in brand loyalty, and calibrating supply chains to adapt to changing volumes.

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