The new regulations concerning in-store promotion and off-shelf display of high fat, salt and sugar (HFSS) products, which will come into force in 2022, are expected to result in 26% of shelf-space in UK supermarkets being “up for grabs”, according to new research from IRI.
IRI noted that HFSS categories – including confectionery, yoghurts and fruit juices – currently make up 38% of actual store space, but this is forecast to drop to just 12% when the new restrictions are introduced.
Across all HFSS categories, IRI forecasts that around 5% of sales are at risk – with chocolate being the most impacted (14% of sales estimated to be lost), due to chocolate gaining more incremental sales from being on display and from volume promotions.
Estimated impact on HFSS categories due to in-store restrictions:
| Category | % £ Sales Retained | % £ Sales Lost |
| Chocolate | 86% | 14% |
| Biscuits | 91% | 9% |
| Ice Cream | 92% | 8% |
| Crisps, Snacks & Nuts | 92% | 8% |
| Pizza | 92% | 8% |
| Cakes | 93% | 7% |
| Sugar Confectionery | 95% | 5% |
| Yoghurt | 96% | 4% |
| Soft Drinks | 97% | 3% |
| Ready Meals | 98% | 2% |
| Frozen Fish | 99% | 1% |
| Chilled Deli | 99% | 1% |
| Frozen Potatoes | 99% | 1% |
| Total HFSS Categories | 95% | 5% |
| Source: IRI Analytics, HFSS, based on 2019 Major Multiples |
Joe Harriman, IRI’s HFSS Strategic Consultant, noted: “With the ban on in-store promotional activity and display for HFSS products, this is a real opportunity for brands that have no in-category competition or that offer healthier alternatives as retailers look to rethink their ranges. It’s not just newly available space either. With retailers rethinking their store layout, with initiatives like ‘power aisles’ and ‘premium’ in-aisle displays, there are plenty of opportunities for both LFSS (low fat salt sugar) and HFSS categories to benefit.”
IRI’s analysis shows that the impact of the new regulations will be felt strongly in the chilled category, with HFSS product set to see display space drop from 52% currently to 18% next year. The removal of products like desserts, pizzas and yoghurts will increase the amount of available off-shelf space.
In terms of incremental value within chilled dairy and desserts, IRI data shows that butters, fats and margarines (with 13% of off-shelf space) deliver the most value, with £4,608 of incremental sales per unit of display. Desserts and yoghurts have a much lower impact, delivering £995 and £1,060 respectively on sales uplift, despite taking up more than 50% of shelf space.
Harriman suggested that the lasting legacy of the HFSS regulations will be the impact on new product development (NPD) and how manufacturers plan to develop and launch new products in the future.
He said: “We know that 91% of products fail and are gone within 12-18 months. We also know that 16% of all new products have some off-shelf support in the first four weeks after launch, but this will no longer be allowed for HFSS products. Manufacturers and retailers will need to make sure NPDs don’t fail and to think seriously about how they launch new products in the future.”
NAM Implications:
- ‘HFSS currently make up 38% of actual store space, but this is forecast to drop to just 12%’
- (note also chilled category impact)
- Best keep in mind that any category/brand hoping to optimise space released…
- …will need to at least match HFSS financial performance, sales and gross profits, vacating the space.
