Most Consumers Struggle to Afford Food

Consumers are struggling to afford what they eat, a new report from consumer research firm Attest reports. The report found that well over half (59.5%) of consumers say they are struggling to afford the food they want to eat at least some of the time. Ten percent reported ‘significant’ struggles to afford food.

“The scale of the struggle faced by so many Americans is especially stark,” said Jeremy King, CEO, and founder of Attest. “Six in 10 admit that one of the most basic human needs, the ability to put food on the table, is a real challenge right now. The consequences of food insecurity cannot be understated, with people’s long-term health suffering significantly as a result.”

King offers ways to help consumers with food insecurity, including shopping in different stores, checking for specials and coupons but especially store brands.

“For example; many grocery stores are actively promoting private label products (often because it’s more profitable for the grocery store), and consumers can jump on that trend with a lot of value to gain, with little/no deterioration in quality (just a bit more time and travel, to discover new offerings and capture the value on offer),” he said.

Attest’s report, “Facing Up to Food Insecurity,” also found 34% of Americans say they never shop at independent food stores or farmers’ markets. Consumers believe independent retailers and farmers’ markets often have higher prices. The report discovered 67% of respondents go to two to three different stores to buy groceries, with 27% reporting that they are loyal to one store.

Another key finding of the report was regardless of age or income, 85.5% of Americans are willing to cook, with only 14.5% saying they do not like to cook.

“Given issues around food security, it is especially positive that 8 in 10 Americans are keen to cook their own meals,” said King, adding that pre-prepared food and ready-made meals are typically more expensive than the sum of the raw materials. It is better, in that case, to buy whole foods at the grocery store.

To find inspiration for their meals, consumers most commonly turn to recipe sites or apps (36%) and social media (29%). Only 11% use cookbooks. And while many respondents’ own microwaves (85%) for quick meals, a surprising 26% do not own full-sized ovens and 27% do not have freezers. Notably, air fryers are becoming a popular appliance, and 58% own one.

The report’s findings came from 2,000 working-age adults selected for a July 12-19 survey panel by Attest.

Younger Consumers Shopping More at Convenience Stores

According to Convenience Store News’ 2023 Shopper Study, C-stores have a great appeal for younger shoppers as they are visiting the stores more than their older counterparts, with many visiting daily.

The study found younger consumers went to the stores more frequently when compared to one year ago. One-third of Gen Z respondents (33%) and 30% of millennials said they visited convenience stores more frequently in the past year. Meanwhile only 17% of Gen X respondents and 8% of baby boomers surveyed said they were making more trips to convenience stores. 

Meanwhile 26% of Gen Z and 31% of Millennials said they are shopping at their favorite convenience store each day. By comparison, 23% of survey respondents in Generation X and only 10% of baby boomers said the same.

Overall, 14% of Gen Z shoppers and 13% of Millennial consumers reported daily visits to the Convenience Store News study. Daily trips to supercenters/mass merchants by these two key groups were similar to grocery stores as 13% of Gen Z and 12% of Millennials respectively saying they shopped daily at retailers in this channel of distribution.

Slightly less than half (49%) of Gen Z respondents and 48% of Millennials visit a C-store at least once a week. Fifty-one percent of Gen X consumers surveyed and 48% of baby boomers said they pay a visit to their favorite convenience store at least once a week.

When it came to what products they were buying, salty and sweet snacks, energy drinks, stilled bottled water and snack packs are among the most popular items to purchase at convenience chains.

More Consumers Buying Private Brands to Offset High Prices

A new consumer survey from The Feedback Group reveals that shoppers continue to turn to store brands to save.

Of the 1,200 consumers surveyed by The Feedback Group, 44% said they are purchasing store brands over national brands, which is an increase of 6% from the same survey the group conducted in 2022. Consumers are also increasing their purchasing of products on sale (52% in 2023 vs. 43% in 2022) while 46% said they are eating at home more to save money.

The study’s findings are important because even as inflation pressures have begun to ease, consumers are still focused on prices and buying more private brand products,

The survey also asked shoppers if, on their most recent visit, the prices of private label/store brands were less expensive than name brand alternatives. On a five-point agreement scale, the mean score was up to 4.16 this year compared to 4.06 last year, showing shoppers give store brands more credit in price compared to national brands this year versus last year. 

The Feedback Group asked consumers what they thought about the quality of private label products when compared to name brand alternatives and consumers attitudes have not changed. Scores for both years were close, with a score of 4.18 agreeing store brand quality was equal compared to 4.20 last year.

Brian Numainville, a principal with The Feedback Group, commented in a press release, "Food shoppers continue to adapt to cope with food inflation through a variety of strategies, doing more of nearly all of them versus a year ago. While the top strategy, not surprisingly, is buying more items on sale, with more than five in ten shoppers now doing so, more than four out of ten shoppers are eating more often at home instead of restaurants and buying more store brands instead of national brands, among many other behaviors.”

Feedback also reported consumers were purchasing more food and groceries at stores with lower prices (38%, down from 46%), buying fewer last-minute or impulse items (36%, up from 25%), using a store's weekly sales flyer – paper or digital – to plan a shopping list (31%, up from 23%), comparing prices at multiple stores before buying an item (29%, up from 18%), purchasing more bulk-pack items to lower price per serving/unit (26%, up from 25%), and buying fewer organic items and products to cut costs (16%, up from 12%).

 

 

American Consumers Skipping Meals Due to Financial Concerns

Customer data firm dunnhumby has found 36% of U.S. families have skipped meals due to financial reasons over the past year, according to its latest Consumer Trends Tracker quarterly study.

The dunnhumby study found that 18- to 34-year-olds and 35- to 44-year-olds have the highest rate of skipping meals among all age groups, at 38% and 37% respectively.

“Over this year-long study, we have seen a very troubling trend of nearly a third of all Americans and nearly 40% of younger Americans, skipping meals due to financial concerns,” said Matt O’Grady, president of Americas for dunnhumby. “And wave after wave, our research has also shown that 18- to 44-year-olds are at the epicenter of a food and financial insecurity crisis that shows no signs of abating,” O’Grady added about the report. 

The study also found Americans are not yet feeling relief from the drop in the food-at-home inflation rate and believe it is 15 points higher than the actual 7.1% annual rate as measured by the U.S. Bureau of Labor Statistics. Oklahoma, Arkansas, Louisiana, Alabama, Tennessee, Georgia and West Virginia have the highest rate of food (36%) and financial insecurity (70%) in the country. 

The study reported more consumers are looking for deals, with 40% reporting they are shopping at different stores to find the best value, a 9% increase year over year. Consumers are most willing to shop around for non-alcoholic beverages (60%), packaged foods (55%) and frozen food (54%). 

Shoppers have also increased their usage of omnichannel resources over the last year to save money with grocery rewards programs. Some 80% of consumers use at least one grocery rewards program with 20% being light users, 44% are medium users and 16% are heavy users. 

Total family finances were found to be a concern according to dunnhumby. Sixty-two percent of those surveyed said they would have a hard time paying an unexpected expense of $400, and that percentage jumps to 75% for consumers between the ages of 18 and 44. Meanwhile, 18- to 34-year-olds and 35- to 44-year-olds have the highest rates among age groups when it comes to reporting skipping meals, with 38% and 37%, respectively.

Private Brand Manufacturers Optimistic On Growth

According to a survey by Daymon, despite continued challenges in the industry, private label manufacturers are increasingly optimistic about the growth of private brands. In turn they are prioritizing investment in capacity, innovation, technology, and sustainability to stay competitive.

The 2023 Private Brand Manufacturer Outlook Survey found manufacturers are also showing resilience by diversifying supply chains and negotiating price increases.

One highlight of the report was the positive view companies have for the future of store brands. Manufacturers are increasingly optimistic about the growth potential of private brands and are likely to continue investing in product development and collaborating with retailers to further expand private brands in the market.

Manufacturers are also planning strategic investments over the next year to remain strong and bring differentiation to the market. The top two priorities are product innovation and increasing capacity, according to the survey. Manufacturers understand that innovation is vital for sustaining growth and recognize the importance of optimizing their production capacity to achieve economies of scale and support business expansion strategies.

Manufacturers are increasingly prioritizing sustainability as one of the key focus areas for their company investments soon. Sustainability has become a business imperative, and manufacturers recognize that their efforts should extend beyond their own operations.

However, as costs have been high for ingredients and commodities, long-term concerns regarding energy and labor conditions will persist. The survey suggests manufacturers will focus on risk management strategies, diversify supply options, and strengthen relationships across the value chain.

In total, when it comes to store brands, the study found manufacturers are optimistic about the growth of the industry and are focusing on investments in capacity, innovation, technology, and sustainability to help continue growth.

Seven in Ten Buying More or Same Amount of Private Label

A YouGov poll conducted exclusively for Progressive Grocer found that 70% of shoppers are buying the same or more private label grocery products this year.

According to the poll, 91% of consumers say inflation “significantly,” “moderately” or “slightly” affected their grocery shopping habits over the past year. This has led to more consumers actively working on their household budgets and the best ways to save.

Half of the respondents said they are buying “about the same” amount of private label products as they did last year, while another 20% are buying more. When shoppers were asked if they choose branded items or store brands when buying food, 39% reported they buy both equally, and 36% said they buy mostly private label products. Only 20% said they only buy name brand products.

When looking at category results from the study, shoppers buy more store brand meat and dairy products (37%) than branded meat and dairy products (24%), while 35% reported that they buy both equally. When it comes to frozen foods, 38% of consumers are buying both branded and store brand items, but 32% are purchasing store brands and 24% choosing mostly name brand offerings.

Name brands do have an advantage when it comes to alcoholic drinks according to the study. Twenty-nine percent of consumers opt for national brands while 14% are buying store brands. The shoppers who are buying both came out to 14%.

Coupons are also gaining in popularity with consumers according to YouGov. A quarter of those surveyed said they “often” use coupons or look for discounts when grocery shopping, while 23% said they “always” do so and 28% reported that they “sometimes” use them. Only 8% said they never use coupons or seek discounts, while 14% rarely used them.

The survey of 1,163 Americans found that most consumers are opting for private label products as one way to stick to their budgets.

Who are the Values-Oriented Consumers?

Values-driven consumers shop more frequently and are more likely to try new brands and products—traits that make them valuable to retailers and brands, according to a study by SPINS.

Today, some shoppers prioritize larger ideals that make for a more complicated but influential customer. They are the values-oriented consumers, and they make up 49% of shoppers. While every consumer has a list of priorities that includes price, ingredients, convenience, and more when they head to the store, values-oriented shoppers find these ideals critical.

SPINS surveyed a representative sample of shoppers and asked them to measure the importance of five product and packaging characteristics. They were product certifications, label claims, ingredients, special diet types, and presence of certain functional ingredients. If a consumer being surveyed rated at least three of these characteristics as important to their buying habits, they were classified as a values-oriented consumer.

For these shoppers, who have access to a wide variety of store and product options, a trip to the store is personal and a chance to use their dollars to support products that meet their standards. They want products that are good for people, good for health, good for animals, and good for the planet.

Values-oriented consumers are seeking new products. Sixty-five percent of those consumers are extremely or very adventurous when it comes to trying new brands and products. These shoppers are actively seeking out new items, doing their homework before making a purchase, and heading to the store more than other shoppers.

SPINS survey also found 74% of values-oriented shoppers always or usually look at ingredients prior to purchasing a product while 75% of values-oriented shoppers always or usually pay attention to labels on the packaging for food and beverages. In addition, 73% of values-oriented shoppers are influenced by product certifications when purchasing a product.

While values-oriented consumers do more than just look at product packaging to understand what they’re purchasing. These shoppers use many resources, including QR codes, shelf tags, and websites to go beyond the label and discover a complete picture of the products they purchase. Once they learn about these products and find one that meets their criteria, they are willing to purchase.

The survey reported 80% of values-oriented shoppers identify animal welfare, environmental welfare, labor/worker welfare, and ingredient sourcing as worthy of paying a premium for while nearly 90% are willing to pay a premium specifically for health and wellness attributes.

 

Many FMCG Manufacturers Able to Increase Margins

A study by consultant Oliver Wymann shows that last year, many large consumer goods producers throughout Europe made significantly more profit on average. Medium-sized producers had to accept declines on average. According to the study, in contrast to the food trade and medium-sized companies, the European FMCG companies benefited from expansions beyond Europe - especially in America and Asia. Many international retailers were also able to increase, albeit significantly less.

For the analysis, the consulting company examined the sales development as well as the profitability of 70 major European consumer goods producers and food retailers. The analysis is not representative, but provides at least some figures for the ongoing debate on price increases.

Those Over 35 'Order Most Often' From Quick Delivery

Data from research agency Hiiper about quick commerce in the Netherlands shows that the age group that most often order from quick delivery companies such as Flink and Getir is not the expected group of teenagers and people in their twenties. Instead, consumers between the ages of 35 and 45 order most often, on average about eight times a year.

Britons Reportedly Pay the Most for Groceries

Market research company Circana reveals that the inhabitants of Great Britain spend the most on food of all countries in Europe. Prices for milk and cheese in particular have risen sharply since last year. Other products such as animal feed, detergent, baby food and diapers also became a lot more expensive compared to other European countries. The researcher examined sales figures in Great Britain, the Netherlands, Spain, France and Germany.

The London School of Economics previously calculated that the British spend at least €5 billion more on groceries than before leaving the EU in 2020. The cause is that the British have to import a relatively large amount of food. It is precisely these imports that have become more expensive since Brexit.