Grocery Shopper BehaviorGrocery Shopper BehaviorQ2 2009Q2 2009
- - Baseline of shopper behavior todayBaseline of shopper behavior today- Changing shopper in the face of economic stress- Changing shopper in the face of economic stress- A new shopper segmentation- A new shopper segmentation
July 2009
2
Recession Changing a GenerationRecession Changing a Generation
3
““The Great Recession”The Great Recession”
4
But Real Concern ExistsBut Real Concern Exists
5
Yet Overall Grocery Sales are FlatYet Overall Grocery Sales are Flat
What’s Going On? Has Nothing Changed?
6
ObjectiveObjective
• The purpose of this study is to ascertain the current economic mood of consumers and how the economy has affected grocery shopper behavior in the United States– What behaviors have surfaced?
– What categories have been most affected?
– What is anticipated for the future?
• It is also designed to introduce a new American grocery shopper segmentation
METHODOLOGYMETHODOLOGY
7
8
MethodologyMethodology
• An online survey was conducted between May 28th and June 4th, 2009 among 1,106 grocery shoppers. – Nationally representative sample drawn from the DRI Online Panel
– Questionnaire designed by Thinkvine and DRI
– Survey programmed and hosted by DRI
– Segmentation/advanced analytics by Thinkvine
• Sixteen grocery categories analyzed– Milk, paper towels, bread, cookies, crackers, rte cereal, orange juice, salty
snacks, juice beverages, pasta sauce, yogurt, laundry detergent, soft drinks, salad dressing, pet food, and coffee
• Cluster analysis identified six distinct segments of shoppers based on economic impact, lifestyle changes and shopping behaviors
OVERALL FINDINGSOVERALL FINDINGS
9
10
No Surprise Today’s Shoppers are No Surprise Today’s Shoppers are Down on the EconomyDown on the Economy
Q4. What is your perception of today’s economic climate? 100-pt scale
6%
2%
49%
43%
"Great"
"Good"
"Fair"
"Poor"
N=1106
11
……As a Result, ¾ Are Changing Their BehaviorAs a Result, ¾ Are Changing Their Behavior
Q5. In recent months, have you changed your lifestyle at all to stretch your dollars more?
31%
42%
9%
19%
Yes, I've madesubstantial changes
Yes, I've made somechanges
Yes, I've made minorchanges
No, I have not changedmy lifestyle
N=1106
73%
1212Q22. In the past six months, has anyone in your household been affected by any of the
following? Please check all that apply.
Affects of Economy
26%
4%
4%
5%
8%
11%
13%
21%
23%
26%
30%
32%
36%
None of these
Other financial issue
Difficulty selling a house
Home foreclosure/mtg issue
Serious illness
Difficult access to credit
Financial support to family or friends impacted by economy
Job loss/unemployment
Investment losses
Job uncertainty
Credit Card Debt
Income reductions
Difficulty in paying bills
And ¾ of These Shoppers Claim to be And ¾ of These Shoppers Claim to be Negatively Impacted by Today's EconomyNegatively Impacted by Today's Economy
N=1106
131313
Cuts Span All Spending CategoriesCuts Span All Spending Categories
Q6. In what areas have you made changes?
29%
37%
60%
71%
79%
80%
53%
42%
Healthcare expenditures
Home maintenance
Charitable giving
Large expenditures
Vacations
Clothing
Small cutbacks toeverday expenditures
Entertainmentexpenditures
But concentrated on entertainment and the everyday
N = 1010 Made Changes
141414
A Return to Higher Levels of Spending is Not A Return to Higher Levels of Spending is Not Anticipated for This YearAnticipated for This Year
Q7. Do you anticipate making additional cutbacks in the next six months?
47%51%
3%
Yes, I expect to makeadditional cutbacks
No, I expect to be spendingabout the same
No, I expect to increase myspending
N = 1010
15
Even an Economic Recovery is Unlikely to Even an Economic Recovery is Unlikely to Bring Back Old Spending HabitsBring Back Old Spending Habits
Q8. Once the economy improves, do you anticipate that you will continue to use the saving strategies you are implementing to weather this tough economy or will you return to your previous spending habits?
52%
41%
5%2%
I w ill continue to use mysaving strategies
I w ill spend a little more,but try to be more
conservative than before
I w ill return to myprevious spending habits
Don’t know
N = 1010 Made Changes
16Q19. In what ways, if at all, have your grocery shopping habits changed during this economic downturn? Please check all that apply.
58% 57% 55%
47%44% 42% 40%
I stock up on saleitems
I reducedspending on non-essential items
I use morecoupons/
promotions
I reduced impulsepurchases
Buying fewerconvenience
foods
Make fewer tripsto the grocery
store
Trade down tostore brands
Shoppers are Focusing on Buying Needed Shoppers are Focusing on Buying Needed Essentials – On Sale/With CouponsEssentials – On Sale/With Coupons
N = 1106
17Q19. In what ways, if at all, have your grocery shopping habits changed during this economic downturn? Please check all that apply.
24%
20% 20% 19% 18%
15%
Shop at DollarStores more often
Shop at a closerstore to save gas
Buy cheaper cuts ofmeat
Shop at Whse clubsmore
Switched to a lowerpriced store
Buy less fruits/vegetables
But Shoppers are Least Likely to Give Up But Shoppers are Least Likely to Give Up Healthy Fruits/VegetablesHealthy Fruits/Vegetables
N = 1106
18
Half of Shoppers are Spending Less on Half of Shoppers are Spending Less on Groceries This YearGroceries This Year
Same40%
More13%
Less47%
Q10. Is this about the same, more or less than you spent at this time last year?
Avg. spending per
week $108
% Spending less on grocery shopping
Spend $100 or less each
week
Spend >$100 each
week
51% 41%
Focused on lower income/lower spenders
19Q14. How important is it for you to get the absolute lowest prices when you are grocery shopping?
38% 39%
0%3%
19%
5 - ExtremelyImportant
4 3 2 1 - Not at all important
Absolute Lowest Prices are a Requirement Absolute Lowest Prices are a Requirement for Today’s Shopperfor Today’s Shopper
Importance of Absolute Lowest Prices
N = 1106
77%
20
Q15. Sometimes in order to get the lowest prices, you have to make some changes to how you shop. Please allocate 100 points across these attributes based on how likely you would be to make these changes. Note: asked among those desiring absolute lowest prices.
N = 1064
……Coupons/Specials are Key to Getting Coupons/Specials are Key to Getting These Absolute Lowest PricesThese Absolute Lowest Prices
0.4
0.6
0.9
1.5
1.5
1.8
2.0
2.8
3.6
6.0
6.5
6.6
7.3
8.7
10.2
11.1
11.6
16.8
Store has poor reputation
Shop at unclean store
Poor customer service
Slow checkout
General poor selection
Poor selection of natural/organic
Shop at a crowded store
Choose avg quality meat/produce over highest
Drive to store that is not the closest
Drive to multiple stores to get best deals
Bag own groceries
Browse Internet coupons
Switch to lower cost brand
Compare store flyers
Switch to store brand
Shop at a store w/better weekly specials
Buy only sale items
Clip coupons
Avg. 6.7 willing to make changes
More desire to switch to store brand or lower-priced
national brand
But Won’t Give UpCustomer Service
21Q21a. With regard to grocery shopping, how well does each of the following statements describe you?
21%
29%
32%
38%
51%
55%
62%
74%
81%
Buy what I like regardless of price
Prefer name brands even if more than store brands
Try to buy natural/organic
Look for quick, convenient foods
Get shopping done as quickly as possible
Read store circulars and choose the store w/ best deals
Healthy eating is very important to me
Always try to buy products on sale
Pay close attention to prices of purchases
N=1106
So Name Brands are Falling Short in This So Name Brands are Falling Short in This Atmosphere of Cost CuttingAtmosphere of Cost Cutting
Top 2 Box
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Q21. Now please think again about the specific categories that you purchase. In the past three months, how would you describe your purchasing of each of these categories? Response options: I have made no changes, I only buy my preferred brand with a sale or coupon, I buy a different size of my preferred brand, I buy a lower priced national brand, I buy generics or store brands, I buy my preferred brand in a lower cost store
36%
40%
43%
43%
44%
46%
49%
49%
49%
52%
53%
53%
53%
53%
54%
57%
Milk
Pet Products
Coffee
Bread
Carbonated soft drinks/soda
Yogurt
Laundry Detergent
Orange Juice
Pasta Sauce
Paper Towels
Salad Dressing
Juice Beverages
Salty Snacks
Ready to Eat Cereal
Crackers
Cookies
Purchasing Behavior Changes Seen Most in Purchasing Behavior Changes Seen Most in Snacks, Cereal, Juice Drinks, Salad Dressing Snacks, Cereal, Juice Drinks, Salad Dressing and Paper Towelsand Paper Towels
Percent Who Made Changes
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Q21. Now please think again about the specific categories that you purchase. In the past three months, how would you describe your purchasing of each of these categories? Response options: I have made no changes, I only buy my preferred brand with a sale or coupon, I buy a different size of my preferred brand, I buy a lower priced national brand, I buy generics or store brands, I buy my preferred brand in a lower cost store
7%
8%
8%
8%
8%
10%
10%
11%
11%
11%
11%
12%
14%
14%
15%
19%
Pet Products
Coffee
Salad Dressing
Carbonated soft drinks/soda
Laundry Detergent
Yogurt
Pasta Sauce
Juice Beverages
Salty Snacks
Orange Juice
Ready to Eat Cereal
Crackers
Cookies
Bread
Paper Towels
Milk
National Brand Abandonment is Strongest in National Brand Abandonment is Strongest in Milk, Paper towels, Bread & CookiesMilk, Paper towels, Bread & Cookies
Percent Who Purchase Generic or Store Brands
Although store brand milk and bread purchasing are not a new phenomenon
24Q21. Now please think again about the specific categories that you purchase. In the past three months, how would you describe your purchasing of each of these categories?
7%
11%
16%
19%
19%
21%
21%
23%
23%
23%
24%
25%
25%
26%
27%
29%
Milk
Bread
Pet Products
Coffee
Paper Towels
Orange Juice
Laundry Detergent
Yogurt
Juice Beverages
Carbonated soft drinks/soda
Pasta Sauce
Cookies
Salty Snacks
Crackers
Ready to Eat Cereal
Salad Dressing
Promotion Sensitivity is BroadPromotion Sensitivity is Broad
Percent Who Only Buy Preferred Brand with a Sale/Coupon
NEW SHOPPER SEGEMENTSNEW SHOPPER SEGEMENTS
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262626
Who is the “New Shopper?”Who is the “New Shopper?”
• As you would expect, not all shoppers are affected by the recession in the same way…nor do they respond in the same way
Some shoppers experience substantial hardship, whereas others are less affected
Some shoppers are more active or aggressive in the response to economic conditions, whereas others take a more passive approach
• Along these two dimensions, cluster analysis uncovered six key segments– Some closely resemble previous segments of shopping behavior
– Others are new to the landscape
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Passive
Les
s d
istr
esse
dM
ore
d
istr
esse
dLifestyle Response
Inte
nsi
ty o
f H
ard
ship
Active
New Shopper Segments Vary by Economic New Shopper Segments Vary by Economic Impact and Shopper ResponseImpact and Shopper Response
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Modest Means28.2%
Optimizer12.2%
Unfazed8.3%
Nouveau Poor4.60%
Hard Times21.1%
Cautious Success25.6%
The Unfazed makes up less than 10% of the The Unfazed makes up less than 10% of the sample…sample…
…which suggests that over 90% of respondents have been affected, at least to some degree
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3.9%
20.0%
39.4%
60.9%70.6%
30.7%
50.2%
60.7%
46.8%
35.2%27.5%
42.1%
44.9%
18.5%13.8%
18.5%
3.9% 2.0% 8.7%
Unfazed CautiousSuccess
Optimizers Modest Means Hard Times Nouveau Poor Total
Substantial Changes in Lifestyle Some Changes in Lifestyle
Minor Changes in Lifestyle No Changes in Lifestyle
Q5. In recent months, have you changed your lifestyle at all to stretch your dollars more?
Most have altered their lifestyles, with heftier Most have altered their lifestyles, with heftier changes by Nouveau Poor and Hard Timeschanges by Nouveau Poor and Hard Times
However, sacrifice is nothing new for Modest Means
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% Of Households Impacted UnfazedCautious Success
OptimizerModest Means
Hard Times
Nouveau Poor
Income reduction ... 8.7% 15.2% 28.1% 40.7% 47.6% 58.8%
Job loss / unemployment ... 5.4% 7.4% 21.5% 28.5% 24.9% 52.9%
Job uncertainty ... 5.4% 15.5% 20.7% 31.1% 35.2% 54.9%
Investment losses (e.g. stock market) 10.9% 25.4% 25.9% 20.2% 24.0% 39.2%
Difficulty in paying bills ... 7.6% 12.7% 27.4% 47.4% 54.5% 82.4%
Credit card debt ... 9.8% 15.2% 20.7% 35.6% 48.1% 58.8%
Access to credit ... 4.3% 2.1% 5.2% 13.1% 19.3% 27.5%
Home foreclosure/mortgage issues 0.0% 2.8% 4.4% 2.6% 1.3% 66.7%
Difficulty in selling a house ... 0.0% 5.3% 0.7% 0.3% 0.0% 54.9%
Financial support to family or friend 1.1% 6.4% 8.9% 18.3% 17.2% 27.5%
Serious illness ... 3.3% 4.6% 8.1% 11.2% 9.4% 19.6%
The Economic Numbers Paint a Grim Picture The Economic Numbers Paint a Grim Picture – even the “Unfazed” have been Impacted– even the “Unfazed” have been Impacted
Q22. In the past six months, has anyone in your household been affected by any of the following? Please check all that apply.
31
Employment Status (Respondent)
UnfazedCautious Success
OptimizerModest Means
Hard Times
Nouveau Poor
Employed Full Time 44.6% 49.8% 46.7% 42.0% 39.5% 37.3%
Employed Part Time 15.2% 18.4% 18.5% 22.4% 16.3% 19.6%
Unemployed, Looking for Work 4.3% 4.2% 8.1% 12.5% 16.7% 25.5%
Unemployed by Choice 17.4% 19.8% 20.0% 13.5% 19.3% 13.7%
Retired 18.5% 7.8% 6.7% 9.6% 8.2% 3.9%
Single Earner 30.4% 22.6% 23.7% 23.4% 24.0% 33.3%
Unemployment among the Nouveau Poor is Unemployment among the Nouveau Poor is more than twice that of other segmentsmore than twice that of other segments
Note: Retirees make up nearly a fifth of the Unfazed segment
…and over 5x higher than Unfazed and Cautious Success
32
……and Household Income is Greatly Reduced and Household Income is Greatly Reduced for Nouveau Poorfor Nouveau Poor
…despite a high educational attainment
33
20%
9%
58%
69%
40%
48%
Unfazed CautiousSuccess
Optimizer Modest Means Hard Times Nouveau Poor
Q14. How important is it for you to get the absolute lowest prices when you are grocery shopping?
Absolute Lowest Prices are an Imperative for Absolute Lowest Prices are an Imperative for over half of Nouveau Poor and Hard Times over half of Nouveau Poor and Hard Times
Importance of Absolute Lowest Prices% Rating Extremely Important
3434
8.7%
11.3%12.4%
17.6%
9.8%
12.4%
9.6%
6.1%
9.4%7.8%
11.1% 11.2%
Unfazed CautiousSuccess
Optimizer Modest Life Hard Times Nouveau Poor
Lower Spend Stores Higher Spend Stores
Higher spend = Publix, ShopRite, Sam’s Club, Costco, A&P, Super Target, BJ’s, Schnucks, Big YLower spend = Aldi, Shaw’s, Jewel, Stater Bros., Weis, Roundy’s, Save Mart, Dollar General, Big Lots, Family Dollar , Save-A-Lot
Q11. Where do you usually do the majority of your grocery shopping? Please check one.
Visits to Lower Spend (i.e. discount) Grocery Visits to Lower Spend (i.e. discount) Grocery Stores are Disproportionately Higher for Stores are Disproportionately Higher for Nouveau PoorNouveau Poor
…but also account for roughly 10% of store visits for the higher income segments
35
Avoid processed food. Buy more organic or all-natural foods 20.7% 36.7% 34.8% 26.6% 35.6% 37.3%
Healthy eating is very important to me 48.9% 65.0% 68.9% 54.8% 68.7% 72.5%
Agreement Rating -describes me completely
UnfazedCautious Success
OptimizerModest Means
Hard TimesNouveau
Poor
Buy name brands even if they do cost more than store brands 40.2% 35.0% 35.6% 23.7% 21.0% 21.6%
Look for foods that are quick and convenient to prepare 44.6% 38.2% 43.7% 38.5% 34.8% 27.5%
Hard Times and Nouveau Poor are Willing to Hard Times and Nouveau Poor are Willing to Sacrifice Name Brands and Convenience for Sacrifice Name Brands and Convenience for Lower Prices…Lower Prices…
…but are reluctant to give up healthy eating
36
Agreement Rating -describes me completely
UnfazedCautious Success
OptimizerModest Means
Hard TimesNouveau
Poor
Buy name brands even if they do cost more than store brands 40.2% 35.0% 35.6% 23.7% 21.0% 21.6%
Avoid processed food. Buy more organic or all-natural foods 20.7% 36.7% 34.8% 26.6% 35.6% 37.3%
Healthy eating is very important to me 48.9% 65.0% 68.9% 54.8% 68.7% 72.5%Look for foods that are quick and convenient to prepare 44.6% 38.2% 43.7% 38.5% 34.8% 27.5%
Pay close attention to the price of my purchases 62.0% 71.4% 85.9% 82.7% 91.0% 94.1%
Read store circulars; shop at store with best deals that week. 37.0% 36.0% 76.3% 43.6% 79.8% 84.3%
Always try to buy products that are on sale 60.9% 57.6% 81.5% 77.2% 86.7% 90.2%
However, However, OptimizerOptimizer Finds Ways to Make Finds Ways to Make Name Brands, Convenience and Health More Name Brands, Convenience and Health More AffordableAffordable
…by effectively using sales and promotions
37
Despite Financial Constraints, Promotional Despite Financial Constraints, Promotional Usage of Usage of Modest MeansModest Means Greatly Lags Greatly Lags Hard Hard TimesTimes and and Nouveau PoorNouveau Poor
50%56%
83%88%
11%19%
42%
84%
69%64%
81%
69%
Unfazed CautiousSuccess
Optimizer Modest Means Hard Times Nouveau Poor
40%30%
86% 82%
7% 1%
99%
1%
97%
77%
40%
82%
Unfazed Cautious Success Optimizer Modest Means Hard Times Nouveau Poor
Always Often Use More than Before
Store & Manufacturer Coupons
Compare Store Flyers
38
15.2%
38.5%
62.5%75.1% 72.5%
46.6%
79.9%
60.0%
35.9%
24.0% 27.5%
50.5%
4.9% 1.5% 1.6% 2.9%
14.1%
76.1%
9.8%0.0%0.9%
Unfazed CautiousSuccess
Optimizers ModestMeans
Hard Times Nouveau Poor Total
No, I expect to spend more over next 6 months
No, I expect spending to be about same over next six months
Yes, I expect additional cutbacks over next 6 months
Q5. In recent months, have you changed your lifestyle at all to stretch your dollars more?
Spending constraints are expected to Spending constraints are expected to continue or tighten over the next six monthscontinue or tighten over the next six months
Further cuts even expected by15% of Unfazed and Cautious Success
39
47%44%
61%
41% 48% 45%32% 39%
49%64%
Casual Success Optimizer Modest Means Hard Times Nouveau Poor
I will return to my previous spending habits
I will spend a little more, but try to be more conservative than before
I will continue to use my saving strategies
I don't know
When the Recession is Over, None of the When the Recession is Over, None of the Affected Segments Claim They Will Return to Affected Segments Claim They Will Return to Old Spending HabitsOld Spending Habits
Q8. Once the economy improves, do you anticipate that you will continue to use the saving strategies you are implementing to weather this tough economy or will you return to your previous spending habits?
40
In Conclusion…In Conclusion…
• Less than 10% of grocery shoppers are “unfazed” by the current economic crisis, suggesting that over 90% have adjusted their lifestyles at least in some way
• Out of the crisis, a new class of shopper-- the Nouveau Poor – have joined the ranks of the economically distressed. – Accounting (4.6%) of shoppers, the Nouveau Poor have seen a reversal of fortune,
primarily stemming from the housing and credit issues
– They are willing to put considerable effort into getting the absolute lowest price
– Although willing to sacrifice brand and convenience for a lower price, the nouveau poor shopper is still looking for health – fruits and vegetables aren’t negotiable
• Across segments, promotion sensitivity and brand switching abound, but shoppers draw the line when it comes to their pets.
• The big unknown….. Is this permanent? How long will this last?
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What’s Next?What’s Next?
• Respondents who participated in this research have been invited to join a private, market research online community to discuss their experiences further in an online qualitative format.
• A fall wave of the quantitative research is planned for September.
• Space is available for proprietary questions in our fall wave. Opportunities also exist to ‘listen’ to discussions on our economy online community.
THANK YOUTHANK YOU
For More Information Contact:
Jeffrey D. MillsVice President, Marketing513-477-1729 [email protected]
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43
Past Three Month Category Changes are Past Three Month Category Changes are Highest for Nouveau Poor and Hard TimesHighest for Nouveau Poor and Hard Times
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Cookies
Crack
ers
Salty
Snack
s
Juice
Drin
ks
Salad
Dre
ssin
g
Ready t
o Eat
Cer
eal
Paper
Tow
els
Pasta
Sau
ce
Laun
dry
Deter
gent
Ora
nge Ju
ice
Yogur
t
Soft D
rinks
Bread
Coffee
Pet P
rodu
cts
Milk
Unfazed Cautious ComfortOptimizer Modest LifeHard Times Nouveau PoorTotal
(%) Have Changed
Q21. Now please think again about the specific categories that you purchase. In the past three months, how would you describe your purchasing of each of these categories? Response options: I have made no changes, I only buy my preferred brand with a sale or coupon, I buy a different size of my preferred brand, I buy a lower priced national brand, I buy generics or store brands, I buy my preferred brand in a lower cost store