Economy and More Shape Shopping Habits

It should come as no surprise that the generally lackluster economy and the added burden of food and fuel prices are driving consumer behavior when they shop for food or dine out. That was the conclusion of the Food Marketing Institute (FMI) U.S. Grocery Shopper Trends 2008 report released at the 2008 FMI Show plus MARKETECHNICS in Las Vegas. The report also highlighted a renewed confidence in the safety of the food supply and heightened interest in sustainability related to grocery shopping.

Just one week earlier in Washington, D.C., at a Joint Economic Committee hearing on skyrocketing food prices, Joseph Glauber, Ph.D., USDA’s chief economist noted, “In 2007, the Consumer Price Index for food in the U.S. increased by 4%. This was the largest annual increase in retail food prices since 1990. In 2008, the Department of Agriculture’s Economic Research Service projects retail food prices will increase by 4% to 5%.”

These rising food costs have impelled 71% of Americans to increase at-home meal preparation while decreasing the amount they eat at restaurants. Today, families eat their main meal at restaurants only 1.2 times per week, vs. 1.3 in 2007 and 1.5 in 2006. This saves a significant amount of money, because eating out costs a median of $12 per person compared with $5 for a home-cooked meal. Consumers are watching their pennies at the supermarket, too: FMI reports 67% are purchasing fewer luxury food; 60% are buying more store brands; and 58% are eating more leftovers.

The vast majority (91%) also believe they eat healthier when dining at home. In fact, nutrition is a fairly high priority for shoppers, with 41% “very concerned” about the nutritional content of the foods they eat, and 47% “somewhat concerned.” Their main nutritional focus is on fat, with more than half checking saturated fat, trans fat  and total fat content on the Nutrition Facts label. More than four in 10 look at numbers of calories, whole grains, and salt, sugar and cholesterol levels.

But they still don’t adhere to healthy diets: 62% believe their diets could be healthier, of which 12% believe they have “a lot” of room for improvement. Those most likely to say their diet needs significant improvement include:

• Baby Boomers (68%), especially men (75%).

• Shoppers earning $75,000 to $100,000 (70%).

• Consumers aged 25 to 39 (69%).

• Parents with older children (69%).

The rising cost of gas is not just causing consumers to cut spending elsewhere, it’s also steering U.S. consumers to make fewer shopping trips—less than two (1.9) per week for the second straight year. As for where they go, 37% of consumers cite “low prices” as the overriding factor for choosing a store, a rise of 6% from 2007, vs. the No. 2 reason, which was a convenient location (13%).

“Food retailers can turn these economic challenges into benefits for consumers and the industry,” said Tim Hammonds, president and CEO, FMI. “As people eat out less often, we can help revive the great American home family meal tradition. This presents retailers an opportunity to win back a share of the meal-time market long owned by restaurants, and it provides American families important health, economic and social benefits.”

As memories of massive food recalls and concerns about foreign ingredients recede, the report notes that consumers’ confidence in the safety of supermarket food rebounded to 81%, from an 18-year low of 66% last year. However, consumers remain cautious; only 11% are “completely confident,” vs. 15% in 2007.

With an increased focus on global stewardship, consumers are starting to look for stores with a recycling and sustainability program. According to the report, 20% said this was “very important” when selecting a primary store, and 41% called it “somewhat important.” More than half of supermarkets (51%) sell reusable shopping bags, and 44% of consumers say they use these bags at least once a month. In addition, 70% recycle cans, 62% plastic and paper. Sixty-eight percent are also taking note of locally grown products.