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How to Track Prices and Availability for Essential and Discretionary Goods

4/27/2022
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With inflationary pressures remaining strong so far in 2022 due to a variety of cost-push and demand-pull factors, it is vital for companies to carefully track how prices and availability are changing in core markets. Building various baskets of consumer goods can reveal how inflation and availability are faring across markets and help companies prioritise pricing and supply chain strategies.

Euromonitor International’s Price and Availability Tracker monitors changes in prices and availability across 10 key markets for discretionary and essential consumer goods products. Essential and discretionary products are selected based on Euromonitor’s Industry Forecasting Model, which categorises products based on income elasticity alongside feedback from our industry research teams; for example, milk and toilet paper are essential goods, while potato chips and whisky are discretionary goods. The Price and Availability Tracker covers 148 essential product categories and 285 discretionary categories across six industries, and in this article we will use it to provide insights such as:

  • How are countries’ available online essential and discretionary product prices faring over time?
  • How do e-commerce availability metrics such as available stock keeping units (SKUs) and out of stock rates change and compare against each other due to supply chain pressures?

Online prices of essential goods in the US rise sharply before the holidays

imageixd9q.png

Source: Euromonitor International, Via Inflation Surge: Price and Availability Tracker. Price Index: January
1, 2020 = 100

  • In the US, the median prices of essential goods rose from a median price index of 108.1 on September 1, 2021, to 113.4 on March 31, 2022, an increase of nearly five percentage points in six months. However, as can be seen in the chart above, prices for this basket of essential goods can heavily fluctuate based on demand and the availability of goods.
  • Online prices for this basket of SKUs particularly grew during the weeks leading up to the holidays in the US. The median price index rose to a six month high of 119.28 on December 14, 2021. This put additional strain on US consumers’ budgets, as shoppers saw the highest prices for essential consumer goods while preparing for holiday parties and get-togethers. As demand dropped towards the end of the year, median prices within this basket fell to pre-holiday levels, before beginning to trend upwards again towards the end of the observation period, as suppliers continued to struggle to keep prices low.

Out of stock rates for essential goods in the US consistently rise due to supply chain disruptions

imageezpz5.pngSource: Euromonitor International, Via

  • Also located within the Price and Availability Tracker are two metrics related to countries’ e-commerce supply chain stability: available SKUs and out of stock %. Available SKUs measures a 14-day rolling average of essential goods available on e-commerce sites in the US that are available for purchase, whereas out of stock % measures the percentage of SKUs online that are listed as out of stock by the retailer, also seen as a 14-day rolling average. As retailers can often delist SKUs on a site versus labelling them as out of stock, these two metrics provide a much more holistic view of a country’s e-commerce availability versus focusing solely on out of stock %.
  • In the US, available SKUs of essential goods peaked at over 350,000 SKUs in early November 2021, as retailers ramped up for holiday purchases. However, as supply chain troubles continued to mount in the US, available SKUs trended downwards in the following four months, before finally beginning to recover towards the end of March. Meanwhile, essential goods’ out of stock % rates continually rose in the US in the last six months, from 6.1% in September 2021 to 8.4% at the end of March 2022. While not pictured in the chart, the out of stock % rate for discretionary goods in the US reached 10.2% at the end of March, indicating that retailers were able to place a greater emphasis on stocking the products that matter the most to consumers.

Price volatility for UK discretionary goods closely intertwined with supply chain troubles

imagep4jdy.png

Source: Euromonitor International, Via Inflation Surge: Price and Availability Tracker. Price Index: January 1, 2020 = 100

  • Looking at discretionary consumer goods, online shoppers in the UK saw available median online prices drastically fluctuate during the six month time period. Median prices for discretionary products rose from a median price index of 101.4 on September 1, 2021, to 108.7 on March 31, 2022, an increase of 7.6% in just six months. Prices peaked at 120.9 on February 2, 2022, before gradually reducing towards the end of the observation period.
  • While absolute price increases (or decreases) between time periods are important to track, the volatility of prices is just as important, as this provides insight into how stable an environment is for shoppers on a day to day basis. Coefficient of variation is a standardised statistical measure that looks at the spread of data points in relation to the average. The UK’s basket of discretionary goods median prices had a coefficient of variation score of 19.6%, which was nearly triple the average score of the 10 countries being tracked, indicating that UK shoppers saw the most volatile online prices for this basket of products.

imageiz9i6f.pngSource: Euromonitor International, Via Inflation Surge: Price and Availability Tracker

  • Analysing supply chain availability metrics for discretionary goods in the UK reveals just how chaotic this time period was for online retailers stocking products. Particularly in the first three months of this time period, out of stock % rates for this basket of goods spiked to over 26%, as retailers struggled with Brexit-related supply chain disruptions and a variety of labour shortages.
  • With the exception of out of stock % rates rising at the beginning of the year, rates have returned to relative “normal” and averaged around 11% for the last two months of the observation period, but as can be seen from the dark blue line, available SKUs declined, indicating retailers were seeking to delist products online rather than notify shoppers they were out of stock, given shoppers’ frustrations with availability seen earlier.

With inflation and supply chain pressures top-of-mind for shoppers and companies, tracking the prices and availability of products in a standardised way has never been more critical to stay competitive. For more information on how to track and monitor supply chain availability metrics or how to use Euromonitor’s e-commerce tracking tool Via to build your own basket of goods, such as for cereal or hygiene products to track inflation and availability, please to reach out to learn more.

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