3 Reasons Natural Retailers Are Inflation-Friendly Destinations


Dawn Valandingham contributes to Supermarket News and Senior Vice President of Retail at SPINS, a leader in data and retail solutions for the natural products industry. She leads the SPINS Retail strategy, which includes innovative tactics around recruiting and retaining retail partners. Valandingham is also responsible for adding strategic partners that strengthen the SPINS ecosystem and reinforce its commitment to growing and supporting the natural products industry.

Ever since the Bureau of Labor Statistics announced that the consumer price index hit a record 8.5% in March, inflation has been a top concern for shoppers and retailers. Add to that the ongoing pandemic, supply chain issues and labor shortages and you have a trio of disruptions affecting store shelves and shoppers’ wallets. Thinking back to the financial crisis of 2007, and even the start of the pandemic, we’ve learned that shoppers continue to buy better-for-you products as they adapt to major events.

This ongoing commitment to health means these retailers will continue to be destinations for shoppers focused on their physical and mental well-being. This is a unique opportunity for health and wellness retailers to guide shoppers through inflation. Here’s why:

1. Price gaps are starting to close

Many shoppers believe that health and wellness products are beyond their budget due to their higher prices. This was probably true for many buyers in the early years of the industry and even today for products just entering the market, but it is no longer the norm. Many brands offer better-for-you items that compete with conventional prices, and this competition tightens during times of inflation.

According to data from SPINS, conventional prices are already exceeding health and welfare (HWI) prices. From January 2021 to January 2022, the average selling price (PAR) increased by 7% for all products compared to 5% for HWI. Meanwhile, promotional dollars have been declining: From February 2019 to January 2022, all product promotion dollars decreased by 13% to match HWI’s 7% decline. Cost is still a factor for shoppers, but it becomes less of a point of differentiation when their regular items are in the same range as natural, organic, clean, and similar items. Now is the time to make these products and their comparable prices visible to customers. Additionally, as supply chain issues continue to affect certain items, buyers now considering these HWI items will have a wider range of options to consider.

2. Better-for-you products are accessible forms of self-care

Life has been stressful for everyone since March 2020, and worries about inflation aren’t helping. That’s why you can expect buyers to replicate the behavior we’ve seen throughout the pandemic and in previous financial events: finding joy in small doses. When costs rise, vacations, dining out, new clothes and other optional expenses take a back seat. For many buyers, their health and well-being, both physical and mental, are non-negotiable.

We know that even in tough times, shoppers don’t give up on their dietary needs (i.e. vegan, keto, gluten-free) or wellness goals (i.e. sustainability, clean label, nootropics). And if they eat more meals at home, they’ll buy tasty, high-quality ingredients to replicate their favorite restaurant dishes or simply expand their recipe collection. Consider that SPINS data revealed that global flavor sales increased significantly throughout 2021, with wasabi up 161%, siracha up 108% and arrabiata up 63%. Shoppers are finding ways to liven up their meals when they limit trips to restaurants.

Likewise, fewer happy hours at a bar can mean more homemade cocktails with no artificial ingredients or glasses of natural wine. The body care department also offers options such as bubble baths or high quality body care. These are indulgences that don’t break the bank but allow shoppers to relax for a moment and be pampered. Communicate the availability of these items to customers so they recognize your store as a destination for the affordable, convenient stress relievers they need (and deserve).

3. Private Label Offers Affordable, High-Quality Options

Retailers have worked hard over the past decade to improve the quality of house brands and change customer perception. They not only increased the quality of products through better ingredients, flavors and formulas, but they also diversified the options. Many shoppers switched to other brands when shelves were empty and they wanted to stock up during the first months of the pandemic. What they found were private label items that they liked and kept buying even when they had other options.

Today, shoppers can also choose from private label versions of organic, keto, vegan, and clean products. There are plant-based meat crumbs, vitamins and supplements, granolas, and more. This hard work is paying off as many private labels have become the preferred choice for many shoppers who are not going to trade quality for price. However, that message still hasn’t gotten through to all shoppers, and these items are ideal in times like these.

Don’t forget to educate shoppers and enable product discovery

Make your store the destination that lets shoppers stretch their budget and cross off the items they’re looking for. Ask yourself if your digital and physical experience informs shoppers about their options and enables product discovery. Assess whether you have effective in-store merchandising, e-commerce offerings, and data to create a shopping experience that makes shoppers’ lives a little easier.


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