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RSSAccording 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.
1 person recommends this article.
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There seems to be a misconception with HHI in general, I think. The income is only a number, which may seem suffice in the eyes of the outsider. However, the person earning the $55k plus income may need to do some number crunching exercises in order to survive and be able to sustain something as simple as a healthy diet.
For instance, a HH with only one parent working full-time while the other parent stays home (Child care too expensive perhaps) may seem like a mere/inadequate annual income, of course. So, yes they will fall into this category which is struggling to pay for a decent load of groceries on a weekly or even monthly basis.
Great article-Thanks for the insightful slice of life here!