Friday, June 27, 2008

Consumer Choices & the Economy


Got this bit of research in my email this morning:

Friday, June 27, 2008

Half of Low Income Consumers Having Trouble Buying Groceries

According to a study from Information Resources, Inc., the lagging economy is driving a dramatic move back to basics and a reversal of decades-long trends for convenient and healthier foods. Roughly half of all consumers with incomes less than $55,000 per year say they have trouble affording the groceries they need, while nearly a quarter of those earning between $55,000 and $99,000 also say so. Among those with incomes over $100,000, 16% report having trouble. 42% of consumers say they have given up favorite food brands because of rising prices and economic concerns.

The "IRI Times & Trends Special Report: Competing in a Transforming Economy" report finds that escalating prices have bred high price sensitivity, driving declining demand across multiple categories, growth in private label, trial of lower-priced brands and accelerated channel migration.

Though changes in shopping and purchase behavior vary based on life stage and presence of children, those with lower-incomes report being the hardest hit.

Consumers Having Difficulty Buying Needed Groceries

Income Segment

% Having Difficulty

< $35K

56%

$35K-54.9K

44

$55K-99.9K

24

$100K +

16%

Source: IRI Economic Trend Database/AttitudeLink, May 2008

Consumers are increasing purchases of basic ingredients and meal components, reducing restaurant spending and decreasing purchases of "non-essentials":

Consumers Making Food & Grocery Trade-Offs (Previous 6 Months)


% By Annual Income Level ($x000)

Change

% of Total Consumers

<$35

$35-54.9

55-99.9

100+

Buy fewer individual serving pkgs.

59%

62%

68%

60%

45%

Cut back non-essential groceries

66

75

76

65

42

Buy fewer prepared meals

55

63

59

53

39

Try lower priced brands

50

62

55

46

35

Buy smaller quantities of favorite treats

55

69

58

54

34

Buy fewer organic products

52

59

56

53

34

Buy more private label

50

58

58

47

31

Give up favorite brands

42

58

52

38

19

Buy fewer "healthy" products

32

45

42

28

11

Buy fresh produce

30

46

33

27

10

Source: IRI Economic Trend Database/AttitudeLink, May 2008

Additionally:

  • 53% of consumers report that they are cooking from scratch more now than they were six months ago
  • Stores are seeing a resurgence in sales of frozen foods, perishables, and "center-store" items

Please access more information through IRI here, or Marketing Charts here.

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