US & Global Economic Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights on how major events are impacting different parts of the US and global economies.

Pandemic Grocery Gains Were Not Experienced Equally: Private Labels Took a Hit

Private label – also known as store-branded and generic – products have been seeing growth in recent years. Stores saw value in investing in their own brands and consumers were looking for value. The increasing introduction of higher-end private label items that moved beyond the basics also helped by boosting the average sale price of store-branded products.

However, these firms did not all see the huge pandemic retail grocery gains that the major food and beverage brands saw. Supply chain challenges and the cost-driven lack of flexibility built into their systems made it harder for them to respond to the sudden surges in demand that came as people shifted their food dollars from restaurants to retail.

In some cases, consumers sought traditional branded products to provide some level of certainty and comfort in uncertain times. However, more often than not, people bought what they could get. Because there were supply chain issues and low inventories, shoppers had to buy whichever oatmeal, peanut butter, frozen waffles, canned veggies, etc. that they could obtain. Even dedicated store brand value-based shoppers shifted to branded versions when no other option was available. This was one of the reasons why the average shopping basket price was up in 2020...sales of more branded products and fewer private label versions.

However, that trend is expected to shift back as private label suppliers increase their capacity shortages and improve their supply chains. Branded food product suppliers will need to offer unique options or other elements to retain value-driven shoppers who will shift back to price-based choices when the options are there.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Packaging area, with titles such as Frozen Food Packaging, Ice Cream & Frozen Dessert Packaging, Fresh Produce Packaging, Processed Food Pouches, Candy & Snack Food Pouches, Egg Cartons, Vacuum Skin Packaging, and Meat, Poultry, & Seafood Packaging. Further analysis in Food & Beverage research is also available from our sister publisher Packaged Facts, with titles such as Home Baking: US Market Trends & Opportunities, Food Market Outlook, Beverage Market Outlook, Meal Kits, Global Meat & Poultry Trends, and Global Breakfast Cereal. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage      Packaging    

Higher Than Expected Increases in Housing Starts Shows Market Strength

As has been chronicled many times on this site, a somewhat unexpected result of the COVID-19 pandemic has been a surge in demand for new housing. Nor has demand for housing abated, even as an increasing number of the US population is vaccinated and cities and states lift or loosen the shutdown orders that made the densely populated urban cores much less enjoyable in which to live. Indeed, many Americans have decided that now is the time to buy a home of their own, even despite:

  • a shortage of existing homes for sale, which has driven up the price of homes on the market
  • record-high lumber prices, which can add between $10,000 and $25,000 to the cost of constructing a new home
  • supply chain difficulties that have caused shortages of a wide range of building materials and other items – such as appliances – needed to outfit a newly erected home

Thus, the recent news that housing starts for the month of March were higher than expected is unquestionably good for not only potential home buyers but the construction industry as a whole. Builders are continuing to work to boost output of new homes, knowing that units can be quickly sold once they are placed on the market.

For the construction industry, continuing growth in housing starts will mean that demand for building materials will remain high, particularly of such products as:

  • softwood lumber and engineered wood products, such as plywood and OSB
  • drywall
  • siding
  • roofing materials and such accessories as underlayment
  • cabinetry
  • plumbing fixtures and fittings
  • pipe
  • flooring materials

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Construction and Building Products and Consumer Goods areas. Freedonia also offers an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the current crisis with a comparison to recent recessions. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


March Retail Sales Report: Clues to Post-Pandemic Splurges?

The release of the March retail sales report by the US Department of Commerce is offering clues to our post-pandemic shopping trends. March was a month benefiting from the release of stimulus checks as well as increasing vaccination rates, providing both the funds and the motivation to spend, including on things we collectively hadn’t been buying much of over the past year.

Sporting goods stores had the largest gain in March, jumping 23.5% from February, proving that outdoor and exercise gear remains popular. However, clothing stores saw a large gain as well, rising 18.3% over February levels and a dramatic recovery from March 2020 which indicated the start of the pandemic in the US and the steep decline of apparel shopping. Particular areas of interest include swimwear and resort wear. Not only are people planning for long delayed vacations, but summer is coming. Additionally, resort wear offers a colorful and fun yet breezy and still comfortable alternative to our pandemic sweats and pajamas. Shoes are also seeing strong sales. All that pandemic walking has us burning through trainers/tennies like crazy. However, with all the planning for a more in-person world, summer sandals and comfortable slides are seeing gains too.

Spending at gas stations and at food services and drinking places (up 10.9% and 13.4% over February 2021 levels, respectively) are additional indications that many Americans are resuming travel, commuting, and visits to restaurants and bars.

April retail sales will give us even more hints of what post-pandemic spending will look like in the near term as more of the US population becomes fully vaccinated.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research and our sister publisher Packaged Facts’ research on the pet, food & beverage, and payment cards industries. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19    

March Retail Sales Report: Surge in Sales by Building Materials & Garden Supply Retailers

The release of the March retail sales report by the US Department of Commerce showed that building materials and garden equipment and supplies retailers had an especially strong month, reporting sales gains of over 40% compared to February. Furthermore, March sales were more than 20% higher than those reported last year.

Sales increases by building materials and garden equipment and supplies retailers were due to a number of factors, key among them:

  • restocking by contractors and other construction professionals in preparation of the spring construction season
  • moderate weather throughout much of the US, which allowed by contractors and DIYers to get an early start on new projects
  • continuing demand for new housing, boosting sales of lumber, engineered wood, fasteners, and power tools – all of which are frequently purchased at big box retailers
  • elevated prices for lumber, construction fasteners, and plumbing pipe and fittings needed for a wide range of building projects
  • homeowners purchasing new lawn mowers and tractors and other related equipment in anticipation of a new season of yardwork

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Construction and Building Products. Freedonia also offers an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the current crisis with a comparison to recent recessions. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Construction & Building Products      Consumer Goods      Covid-19    

What’s Behind the Ketchup Crisis? Carryout, Comfort Foods, & Hygiene Concerns

The Ketchup Crisis of 2021 is a thing.

But what’s behind it? Three basic trends are listed here and illustrated by data from the February–March edition of The Freedonia Group National Online Consumer Survey:

  • Carryout. 51% of respondents say they used restaurant curbside pickup or carryout options more because of the pandemic, while 37% say they used food delivery services (e.g., restaurants’ own delivery, Grubhub, Uber Eats, DoorDash) more because of the pandemic. This has boosted the need for to-go condiment packets. Individual cups filled by the restaurant is an option, but one that increases the likelihood of a spill and a mess before it gets to the consumer.  
  • Comfort Foods. 35% of respondents note that they are eating more “comfort” foods because of the pandemic. This trend is highest among people aged 18-39, who are less likely to be concerned about the health impacts of these foods. To many US consumers, “comfort” eating means more French fries, hamburgers, and other foods frequently dressed with ketchup.
  • Hygiene Concerns. 76% still think that the coronavirus pandemic is a health threat to them, personally, while 84% think it’s a health threat to their family and friends. Those who express highest levels of concern are most likely to stay away from community condiments (even where they are available, given local health department restrictions on their use in many areas) and prefer single-use packets as more hygienic options.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Packaging area, including Pouches, Flat Pouches: Side Seal & Pillow, US Restaurant Reopening: COVID-19 Impact on Supplies, Global Foodservice Single-Use Products, and Foodservice Single-Use Products; and Packaged Facts reports such as Food Carryout & Delivery and Food Carryout & Delivery: Special COVID-19 Consumer Insights. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage      Packaging