1. Shopper & Customer

Study: Americans Dramatically Overstate Food Inflation Numbers

The latest dunnhumby Consumer Trends Tracker (CTT) is out, and underlines the fact that “Americans believe that food-at-home inflation has hit 22.8%, 9.7 points higher than the 13.1% annual rate reported by the U.S. Bureau of Labor Statistics.”

Other key findings:

•  “Sixty-four percent of U.S. consumers report they would have difficulty covering an unexpected expense of $400 or more compared to 60% in April-May 2022. The study found a wide range of financial insecurity with a low of 42% in Wisconsin, followed by 48% in Maryland and 52% in Washington, to a high of 77% in Louisiana and Oklahoma.”

•  “Fifty-five percent of consumers surveyed report they are not getting enough of the food they want to eat, and 18% are not getting enough to eat. In addition, 31% of households have skipped or reduced the size of their meals in the last 12 month because there wasn’t enough food, a 5% increase since the last CTT survey May-June 2022.”

•  “Seventy-five percent of consumers want retailers to provide consistent prices. Low base prices are also important across all incomes, even among affluent shoppers. Seventy-three percent of households with incomes above $100,000 reported that low base prices are important, an increase of 7%. Shopping at stores with low base prices is the most common shopper behavior with 59% of those surveyed reporting they do this most of the time.”

•  “Checking prices online before and while shopping is the second most popular customer behavior with 37% of consumers reporting they do this. This behavior is up 6% since the first CTT. Rounding out the top three most common customer behaviors are buying in bulk (35%) tied with shopping at different stores to find the best value (35%).”

•  “Consumers are shifting a significant share of their spending to dollar stores, at the expense of specialty / premium stores. Since April-May 2022, dollar stores’ share of wallet has increased 2.1% (17.8% to 19.9%) while specialty / premium stores has decreased 1.1% (18.7 to 17.6%).”

•  “eCommerce channel penetration has also decreased since peak Covid and appears to be linked to customers’ increasing sensitivity to cost. Between October 2021 and July 2022, there’s been approximately a 20% increase in people citing additional fees (e.g. delivery and picking fees) as a barrier to buying groceries online.”

•  “Eighty-three percent of respondents are looking for cheaper alternatives to the products they usually buy in at least one category. The top three categories consumers are trading down in are packaged food (53%), common household products (52%), and frozen food (42%).”

•  The purchase of premium or luxury items are on the rise, particularly in the 35-44 age range. This aligns with the ‘lipstick effect’ that has been observed in previous recessions, whereby consumers will invest in small luxuries that increase their confidence and perceived attractiveness during periods of uncertainty. Customers are likely to be forgoing more expensive luxuries, in place of small luxuries available at the grocery store.”

KC’s View:

The fact that Americans’ perceptions of food inflation are dramatically inflated – sorry – compared to reality is interesting but, in some ways, irrelevant – marketers can’t get into an argument about this, and have to address perceptions when talking to shoppers.

Many of these numbers simply confirm what we all know about consumer behavior – at moments like these, almost everyone is cutting back where they can, and allowing themselves small luxuries when possible.  Essentially, it is that simple.

Which means that retailers need to figure out ways to give consumers wins wherever they can, so they don’t lose market share to lower priced competitors, while at the same time finding ways to continue to cater to people’s aspirations when possible.

It is like I’ve said here before – great retailing is about aspiration, inspiration, and perspiration.  Not necessarily in that order, nor in equal parts.

The post Study: Americans Dramatically Overstate Food Inflation Numbers appeared first on MNB.

View Original Article
https://morningnewsbeat.com
Do you like MorningNewsBeat's articles? Follow on social!