Consumers Shun Convenience, Scurry Back To Basics

SuperTargetTalk about a topsy-turvy world: A new study shows that consumers are reversing decades-long trends, shunning convenience and healthier foods in search of bargains.

For example, the IRI study, called "IRI Times & Trends Special Report: Competing in a Transforming Economy," finds that 53% of consumers report that they are cooking from scratch more now than they were six months ago. About 59% say they are buying fewer single-serving products, and 55% say they are buying fewer prepared meals, "marking a turning point in the convenience trend," says the report. And 52% say they are buying fewer organic products.

As a result, stores are seeing a resurgence in sales of frozen foods, perishables, and those so-called "center store" items that have languished. And while no one will be surprised that private-label products are still showing strong gains, with 50% of consumers saying they have stepped up their spending on such products in the last six months, it may pain marketers to see that a sizeable minority--42%--specifically say they have given up their favorite brands.



Certainly, the main driver to some of these changes is the economy: Roughly half of all consumers with incomes under $55,000 per year say they have trouble affording the groceries they need, as do nearly a quarter of those earning between $55,000 and $99,000.

But prices are driving consumers to channel-hop in ways that are hard to predict. Escalating prices "have bred exceptionally high price sensitivity, driving declining demand across multiple categories, growth in private label, trial of lower-priced brands and accelerated channel migration," the study finds.

While the total number of shopping trips has fallen 3% in the last year, shifts among types of stores are dramatic. Gas price shock, for example, has caused sales at gas-station convenience stores to drop sharply, falling 6% in the first quarter of the year. The number of trips to grocery and drug stores has also slipped, and even trips to warehouse clubs--long a retail growth category--have slowed. The big winners are SuperCenters, which have seen trips increase 5.7% in the last six months.

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