LENEXA, KAN. — Although inflation is easing, consumers are still feeling the pinch of higher prices that have been rising the past few years. They have a variety of priorities in how they spend their food dollars, and they’re trying to find a balance between money, time, taste, nutrition and experience.
“If you were to compare the prices of food and beverages today vs. 2019 or 2020, you’re looking at 25% to 30% higher,” said Anne-Marie Roerink, principal at 210 Analytics, who spoke at Corbion’s 2023 Media Day on Oct. 17. “I doubt there’s a lot of us here today that are making 25% to 30% more money today than we did in 2019 or 2020, and that’s really what’s causing a lot of the pressure.”
She talked about the conflicting needs forcing consumers to figure out which items they will splurge on and other areas where they’re cutting back as well as finding a balance between healthy, nutritious foods and indulgent treats.
“It is not a race to the bottom where it’s always cheapest,” Ms. Roerink said.
Value and affordability are top of mind for consumers shopping in retail stores.
“When people are buying in grocery stores, they continue to really change things up there,” she said. “We see 93% of shoppers month after month that are applying some kind of money saving measure.”
And nearly four in 10 consumers said they are either eating out or ordering in less often, according to a 210 Analytics survey from August.
Consumers are spending more food dollars at retail stores than at restaurants and spending less at restaurants by cutting back on certain items like alcohol, appetizers and desserts. More people are turning to takeout rather than eating at restaurants. For instance, families may be buying a restaurant entrée to bring home then supplementing the dish with chips, drinks and other items. This creates opportunities for retailers.
“Every single department around the store has an opportunity to add onto those restaurant-based meals,” Ms. Roerink said.
Consumers are also cooking hybrid meals at home, buying convenience items to make meal prep easier.
Retailers are finding that consumers are really watching their spending because it’s harder to get shoppers to act on promotions, she added.
“That price has to be pretty hot for them to move on it,” Ms. Roerink said. “And that’s exactly what we see out in the marketplace. Certainly we see a move toward private brands. They are outgrowing national brands in virtually every category. But we’re also seeing not quite the same reaction to promotions.”
Consumers are gravitating toward value and club stores where they save money and stock up on items.
There is a “big willingness to shift channels, more than I’ve ever seen before,” Ms. Roerink said. “Across food and beverages, look at the loss in share for traditional supermarkets. The areas that are picking up share really are the mass supercenters. In other words, Walmart is absolutely growing gangbusters and has been for several years.”
Retailers have many ways to reach out to consumers. They are willing to splurge on holidays and special occasions, which means not only promotions for large holidays but also days like National Grilled Cheese Day.
“You have of course the big primary holidays that we go after, but then if you go after those smaller ones, Mother’s Day, Father’s Day, Labor Day, St. Patrick’s Day, there is a lot of opportunities out there and what I would call the primary holidays, the secondary holidays but also those micro occasions.”
Retailers are finding ways to offer personalized ads, such as highlighting items on sale that the customer has purchased before.
“Value has everything to do with relevance,” Ms. Roerink said. “ ‘I can help you save time and I don’t need to sift through the whole ad when everything I see is relevant to me.’ Sixty-two percent say that is a good or great idea.”
Providing more information on packages to provide greater transparency for consumers and showcasing how products are helping the planet, people or promoting animal welfare are also suggestions Ms. Roerink said would appeal to consumers. Additionally, social media is an effective area of promotion, such as viral TikTok crazes for interesting new products.