The ongoing pandemic will continue to boost spending on consumer packaged goods during the holidays.
The Consumer Brands Association’s holiday forecast estimates that CPG purchases will be up between 9.5% to 11.5% for the holiday season (months of November and December.) The COVID-19 pandemic has pushed year-over-year CPG sales up more than 10% in three of the last four months.
This anticipated growth coincides with recent trends in consumer income and spending that show elevated savings and income gains, as well as households staying home in lieu of traveling, dining out or attending events. A Consumer Brands/Ipsos poll conducted as part of the forecast found that more than two-thirds (68%) of Americans plan to stay local — at their own home or going to the home of nearby family or friends — for Thanksgiving and 75% for the winter holidays.
In a typical year, holiday spending on CPG products is partially driven by more at-home consumption. Due to the pandemic, at-home consumption is already happening at record levels that the holiday season is anticipated to push slightly higher, according to theCPG Pulse: 2020 Holiday Forecast.
CPG purchases averaged an annual rate of $1.41 trillion during the months of November and December 2019. The forecasted growth will translate to purchases that will range between $1.54 trillion and $1.57 trillion in 2020, amounting to an approximate gain between $134 billion to $162 billion over last year’s level.
In addition to what they are spending, Americans are changing how they are spending, as more activity moves to e-commerce. Online grocery has rapidly expanded, with 42% of Americans reporting that they used some type of online ordering for grocery products in the last six months.
With online shopping up overall across all consumer sectors, there is added pressure on an already-strained supply chain. Fifty-eight percent of respondents say they are at least a little worried about what the increase in online shopping will mean for getting CPG essentials.
Consumers also expressed specific concern about access to household cleaning products as the supply chain contends with the pandemic and holiday season. While 46% of consumers are at least a little worried about access to food and beverage products, 57% say the same about household cleaning products — a difference likely driven by the panic buying that created shortages early in the pandemic.