• by Jack Loechner , Staff Writer @mp_research, December 29, 2011

Trip mix has shifted during the course of the economic downturn, but pantry stock-up and quick trips together still account for about two-thirds of CPG trips and dollar sales.

According to SymphonyRI, in a recent study “the CPG Basket, Fostering Growth in a Time of Conservation,” consumers are very discerning about the money they spend today. They are carefully choosing what they will buy, when they will buy it, and where they will buy it. They are choosing to eliminate and/or postpone some purchases in the name of keeping their budgets manageable.

During the past few years, for many getting by has meant embracing frugal and well-thought-out purchase strategies. This report provides insight into evolving economic conditions and consumer response to those conditions vis-à-vis the consumer mindset during the predominant CPG trip missions.

During the past year, CPG prices have been on a northward march. The U.S. Department of Agriculture is currently placing the all-food Consumer Price Index at 3.5%-4.5% for 2011. In 2012, the rate is expected to moderate only slightly, to 2.5-3.5%1. Escalating food and fuel prices and increased budgetary pressures are having a significant impact on the way consumers approach their grocery-related tasks.

Trip mix has shifted during the course of the economic downturn, but pantry stock-up and quick trips together still account for about two-thirds of CPG trips and dollar sales.

Understanding trip missions among key consumer segments will enable retailers to optimize product mix and store layout. It will also empower retailers to create powerful cross-promotion and merchandising campaigns to reinforce or realign primary trip mix, says the report.

Increases in average basket size, evidenced most predominantly across pantry stock-up and fill-in trips, are reflective of inflationary CPG pricing trends. Average basket ring, across and within trip missions, has been a moving target during the course of the past two years. Basket ring is being influenced by changing consumer rituals as well as vacillating pricing trends.

In the first few months of 2011, average per trip spending began to climb across all trip missions, except special purpose. These increases coincided with an escalating pace of inflation. Baskets within these missions have been growing at an increasing rate throughout much of 2011, yet, the rate of increase remains below the level of inflation.

Within grocery, mass/supercenter and club channels, the predominant trip mission is the pantry stock-up mission. This mission accounts for one-half of sales in grocery, and one-third of sales in each the mass/supercenter and club channels. In all of these channels, pantry stock-ups account for 15%-20% of trips.

Quick trips are a strength of the drug and dollar channels. Within these channels, it is these “need it now” purchases that drive a majority of dollar sales and trips.

Purchase and consumption habits are shifting in a way that is favorable to these retailers. Their “nearby” locales make it convenient to swing by for a few quick items without a significant time or gas outlay.

During these missions, consumers are eliminating purchases deemed “non- essential” and they are changing the timing of purchases to accommodate cash flow. Today’s consumers are focused more on needs versus wants and they are buying closer to the point of consumption.

For CPG marketers, the difficulty is that no “one size fits all” budgetary ritual exists, says the report. Rather, strategies vary by channel, category, brand, and market. Indeed, strategies often vary at the individual household level.

The report concludes by suggesting that an intimate understanding of current and emerging trends within these trip missions will enable manufacturers and retailers to develop and execute strategies that align with overall corporate goals while simultaneously addressing the complex and changing needs of U.S. shoppers in a turbulent economic environment.

For considerably more detail, including charts and graphs, please visit SymphonyRI here to down the PDF report file.