Hungry for savings
CHICAGO ─ Faced with rising food costs, U.S. consumers are turning to the cost savings tactics they’ve mastered over the past few years, according to The NPD Group.
“During the recession consumers adopted thriftier spending behaviors and as time went on they became comfortable with making concessions and getting by with less,” says Dori Hickey, director of product development at NPD and author of What’s Next on the Road to Recovery. “At the height of the recession consumers said they used coupons more, were stocking up on sale items, buying more private labels, shopping at discount stores more, among other money-saving strategies. With food prices rising and consumers experienced at getting the most from their food dollars, consumers are going to be increasing these types of behaviors once again.”
According to NPD’s The Economy Tracker, which monitors consumer sentiment about the economy and spending, a greater percentage of consumers, 21.9%, plan to increase their spending on groceries over the upcoming months, which is up from 16.6% in February. In March, 40.1% of consumers voiced plans to spend more on gasoline over the upcoming months, up from 27.6% in February.
With increased spending on commodities like groceries and gasoline, value and price are once again top-of-mind with the majority of consumers. According to The Economy Tracker, 74% of consumers strongly agreed that they expect coupons and special deals will be much more important in deciding what to buy. Sixty-seven percent said that they would shop less in general and 53%said that they would be buying in bulk.
Another recent NPD report, Before the Store: In-home Insights that Drive In-store Purchase Decisions, finds that staying within a budget is a continual challenge for consumers regardless of food prices or economic conditions. Consumers are more conscious of planning their shopping trips with either a physical or mental shopping list. Among the primary reasons for choosing a store are everyday low prices, good sales and promotions, and location.
“The post-recession consumer hasn’t yet returned to financially stable ground and are now dealing with rising food and gas prices,” says Mark East, president of the food and beverage unit at NPD.“ It’s important for manufacturers and retailers to understand the shifts in consumers’ attitudes and behaviors in light of the economy and rising prices and connect with the consumer both in-home and in-store with a meaningful value proposition.”