Economic Conditions Create a New Grocery Customer


The economic downturn has reached all the way to people's stomachs, according to the 2009 Grocery Shopper Insights Study conducted by marketing analysis firm ThinkVine and Digital Research. Grocery store shoppers have changed the way they eat because of financial concerns, and supermarkets need to understand how consumers now approach grocery shopping.

Today's shoppers are down on the economy, says Jane Mount, executive vice president at Digital Research. Of the 1,106 grocery shoppers surveyed in May and June, 73 percent say they changed their lifestyle substantially or at least made some changes because of the economy. Where are they making these changes? In everyday life, such as going out to eat, or what they buy specifically in stores.

Half of the shoppers surveyed are spending less on groceries this year. They are focusing on buying essentials and sale items, or using coupons. Nearly 77 percent of those surveyed say getting the absolute lowest price is extremely important.

Name brands are falling short in this era of cost cutting: 81 percent of shoppers now pay close attention to purchase prices and 74 percent try to always buy products that are on sale. These purchasing behavior changes happened mostly with snacks, cereal, juice drinks, salad dressings, and paper towels. National-brand abandonment is the strongest with milk, paper towels, bread, and cookies. Good news for farmers, however: Shoppers are least likely to give up fruits and vegetables.

The New Shopper
So who is the New Shopper? Many are more active or aggressive in response to economic conditions, whereas others take a more passive approach, according to Debra Patek, senior economist at Think Vine. Along these two dimensions, cluster analysis uncovered six key segments: the "unfazed" (passive response to economic conditions), "cautious success" (doing well but keep an eye on excessive spending), "optimizer" (balancing what they want in life with the best price), "modest means" (further tightening of the belt), "hard times" (struggling to make ends meet), and "noveau poor "(lifestyle upheaval after a dramatic reversal of fortune").

Some closely resemble previous segments of shopping behavior, Patek says. Others are new to the landscape. "As you would expect, not all shoppers are affected by the recession in the same waynor do they respond in the same way," she says. "Some shoppers experience substantial hardship, whereas others are less affected."

According to the results, the "unfazed" group makes up less than 10 percent of the sample. This suggests that more than 90 percent of respondents have been affected by the economy, at least to some degree. And even an economic recovery is unlikely to bring back old spending habits, the study says.

Both supermarkets and CPG companies that understand these subtle changes in their customers will be able to respond to their needs and preferences to enhance the relationship now and build long-term loyalty.