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Study Highlights Changes in Shopper Behavior

August 24, 2009
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A new survey indicates a whopping 91 percent of Americans have made lifestyle changes - some of which are substantial - in an effort to stretch their dollars during the economic downturn.


A new survey from marketing research firm Digital Research Inc. (DRI), Kennebunk, Maine, and Cincinnati-based analytics service provider ThinkVine indicates a whopping 91 percent of Americans have made lifestyle changes - some of which are substantial - in an effort to stretch their dollars during the economic downturn.

According to the results of an online poll conducted May 28 through June 4, most of the changes involved cutting expenditures on entertainment (80 percent), small everyday purchases (79 percent) and clothing (71 percent) instead of than less-discretionary items such as home maintenance (37 percent) and health care (29 percent).

However, the study continued, almost half of all survey respondents (47 percent) reported spending less this year on groceries than last year, thanks to implementation of a wide variety of cost-cutting strategies, including stocking up on sale items (a change made by 58 percent of those polled), reducing spending on non-essential items (57 percent), using more coupons/promotions (55 percent), reducing impulse purchases (47 percent), buying fewer convenience foods (44 percent), making fewer trips to the grocery store (42 percent) and trading down to store brands (40 percent).

According to the report, consumers were most likely to abandon their preferred national brand in favor of a store brand in the milk (19 percent), paper towels (15 percent), bread (14 percent), cookies (14 percent) and crackers (12 percent) categories.

"Categories like milk and bread have higher private label shares to begin with," Jane Mount, DRI executive vice president, told PL Buyer, "so we weren't too surprised that cash-strapped consumers would turn to them first. Customers already know that these more commodity-type private label products are a viable alternative to national brands, so it's easy to make the switch."

Store brand sales aren't quite as strong in categories such as paper towels and cookies, Mount continued, "but retailers have really upped their game lately and introduced good-quality alternatives to the national brands, including a lot of upscale, premium options."

According to the survey, consumers were least likely to switch from national brands to store brands in the pet products (7 percent), coffee (8 percent), salad dressing (8 percent), carbonated soft drinks/soda (8 percent) and laundry detergent (8 percent) categories, most of which are home to some of the strongest national brand franchises in the marketplace.

In the pet food category, however, consumers' reluctance to switch to private label stems partly from a fear that finicky eaters won't adapt well to a new brand, Mount explained, and partly from a desire to spoil their pets by feeding them “only the best.”

Mount added, "Many pet owners are more likely to switch to store brand foods for themselves before they do so for their pets."

Overall, however, the survey showed consumers are much more interested in rock-bottom prices - an attribute rated "important" or "extremely important" by more than three-quarters of respondents - than they are in brand names. In fact, only 29 percent of those polled said they prefer name brands even if they cost more than store brands.

Moreover, the report said, those consumers most interested in low prices are very open to private label alternatives, ranking private label fourth among 18 different changes in shopping behavior they are willing to make to save money (after clipping coupons, buying only sale items and shopping at stores with better weekly specials).

Not surprisingly, the report continued, willingness to switch was strongest among consumers categorized as "Hard Times" and "Nouveau Poor," only 21 percent of whom said they would buy a name brand even if it cost more than a store brand (vs. 40.2 percent of consumers categorized as "Unfazed" by the recession). Interestingly, however, even the most economically distressed consumers were unwilling to give up eating healthfully, highlighting a golden opportunity for private label, Mount remarked.

"Private label entries in the natural and organic segment can provide a viable alternative to consumers who are very price sensitive but not willing to give up healthy eating," she explained.

Although none of the consumers impacted by the economic downturn (more than 90 percent of those polled) said they would return to their old spending habits once the economy improves, whether or not they follow through remains to be seen.

"The Great Depression changed the behavior of an entire age cohort for the rest of their lives," Mount said, noting the current recession marks the most significant economic downturn since then. "But there are so many other factors to consider. Over the short term, we don't anticipate any huge shift back to the old ways. Long-term? That's the $64,000 question."

For more information, visit www.thinkvine.com or www.digitalresearch.com. - Denise Leathers

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