The New Value Shopper

Published by: International Dairy-Deli-Bakery Association

Published: Apr. 1, 2009

Table of Contents

Bonus: iDEA Tool and MenuTrends INSIDER

Chapter 1 - Executive Summary

Chapter 2 - Research Overview

Study Objectives

Methodology

Consumer Survey Research

The iDEA™ System

Data Sampling

Respondent Snapshot

Retailer Survey Research

Chapter 3 - Impacts of the Softening Economy

Spending Income Is Down

Age

Income

Geography Type

The Vast Majority Are Financially Challenged

Age

Income

Future Outlook

Americans Are Nearly Evenly Split About Their Future Outlook

Demographic, Behavioral & Perceptual Impacts

Strong Concerns About The Economy

By Necessity: A New Focus on Value

Chapter 4 - A Fundamental Shift in How People Buy

Major Spending Cuts

All Types of Consumers Are Cutting Back

Eating & Spending More Time At Home

At-Home Meals Rise Drastically

Who’s Eating At Home More Often? Just About Everyone!

Active & Routine Deal Seeking

Popular Ways to Save

Switching to Lower Cost Products

Impact on Food & Beverage Purchases

Chapter 5 - Savings Mechanisms & Opportunities

Where People Shop

Demographic Impacts

Impact of the Economy

Why People Buy

Changes to The Types of Food Products People Buy

Bulk Sizes & Lesser Known Brands

Similar Activity At All Income Levels

Changes to How People Shop & Save

Fewer Impulse Items & Strict Adherence to Grocery Lists

Price Seeking and Awareness

Coupons and Discount Stores

Changes In Actual Consumption

More Meals At Home, Fewer At Restaurants

Packing Lunches

Eating Leftovers

Cooking from Scratch

Eating Less Expensive Food Products

Meals from the In-Store Deli

Chapter 6 - Specific Behavior in the Store

The Power of Grocery Lists

What’s On Grocery Lists: Products, Not Brands

A Willingness to Substitute Items On Their List

Even Those With Specific Brands On Their Lists

Behavior That Spans The Entire Consumer Spectrum

The Overwhelming Use of Budgets

Consumers Most Likely to Have a Set Dollar Budget

Driving Volume with Pricing

Overcoming Set Dollar Budgets

Behavior Common to All Consumer Groups

Capturing Mindshare with Discounts & Promotions

A Focus on Price Per Unit

Groups Most Likely to Look at Price Per Unit / Ounce

A Quick Recap

Chapter 7 - Category Trends

General Ways Consumers Are Cutting Back

Gourmet Food Products

Single-Serve / Individually-Packaged Food Products

Organic and All-Natural Food Products

Name Brands

Impacts on Specific Categories

Meats / Poultry

Snack Foods

Juices & Sodas

Frozen Foods

Dry Staples—Potatoes, Rice & Pasta

Demographic Trends

Specialty & Premium Products

Whole Grain / Multi-Grain, Local Foods, and Healthy Products

Organic & All-Natural Items

Free-Range Meats, Grass-Fed Beef, and Wild-Caught Seafood

Fortified & Super-Foods: Vitamins, Anti-Oxidants, and Probiotics

Demographic & Behavioral Factors

Chapter 8 - Store Brands & Off-Brands

Store Brands: Purchase Frequency

Across All Consumer Types

Store Brands: Purchase Trends

Demographic & Behavioral Impacts

Fueling Retail Expansion

New Attitudes About Store Brands

Store Brands: Categories

Demographic Impacts

Store Brands: Perceived Quality

High Quality Marks for Store Brands Across All Consumer Groups

Possibilities for the Future

Store Brands: Price Triggers

Price Triggers by Category

Chapter 9 - At-Home vs. Away-From-Home Dining

Not Necessarily Busier

A New Cooking Culture

Away From Restaurants, And Back Into The Home

Eating At Home Not Perceived As Trading Down

A Preference for Home-Prepared Meals

The Economic Appeal of Eating At Home

Response from the Restaurant Industry

Notable Deals At Top Chains

Chapter 10 - Consumer Impact

Purchase Frequency

Visitation Trends

Lower Visitation At Each Area

Quality & Price Perceptions vs. Packaged Foods

Quality Perceptions

Price Perceptions

Acceptability of Premiums

Key Pockets of Loyalty in a Tough Economy

Meal Purchases at the Deli

Quality Perceptions vs. Fast Food

Chapter 11 - Retailer Practices and Attitudes

Recognizing Shopper Behavior

Noted Behavioral Changes

Retailer Attitudes

Anticipated Retailer Responses

At the Deli

Chapter 12 - Solutions

Defining “Value”

Nuances of Value

Ways Shoppers Like to Save

Information Sources

A Framework for Developing New Value Strategies

Potential Tactics

Leverage New Technologies To Engage Customers

Look to Fast-Casual Restaurants for Deli Inspiration

Two Tier Pricing & Value Menus

Expand Into Breakfast

Capture Shopper Attention With Dynamic Displays

Health-Conscious Offerings

Sampling & Cooking Demonstrations

Enhanced Recipes & Further Support

Price Comparisons In-Store

Get On The Grocery List

Preempt Substitutions at the Store

Packaging to Support Bulk Sizes

Consider Cost Per Serving

In Their Own Words: What Consumers Want

Sidebars

Figures & Tables

Figure 1: U.S. Census Regions

Figure 2: Consumer Level of Concern with various factors

Figure 3: Dow Jones US Restaurant & Bar Index - Closing Prices 1/31/03 - 1/1/08

Figure 4: Same Store Sales

Table 1: Consumer Respondent Demographics

Table 2: How much money do you have to spend today compared to 2 years ago? (all)

Table 3: How much money do you have to spend today compared to 2 years ago? (by demographic)

Table 4: Which of the following best describes your level of financial security? (all)

Table 5: Which of the following best describes your level of financial security? (by demographic)

Table 6: In 2009, do you expect your financial situation to…

Table 7: In 2009, do you expect your financial situation to…

Table 8: Please rate your level of concern with each of the following. (10 scale)

Table 9: As a result of the current economy, how has your spending changed in each of the following areas?

Table 10: Percent of Consumers Cutting Back On Spending

Table 11: % of Consumers Spending More Time At Home (in response to the economy)

Table 12: Over the past year, how has your eating behavior changed? (all)

Table 13: Over the past year, how has your eating behavior changed? (by demographic)

Table 14: In response to the economy, which have you been doing more of over the past year?

Table 15: % Who are buying less expensive goods and products more often

Table 16: How many times per month do you purchase foods from the following types of stores?

Table 17: % Purchasing Food from Various Formats At Least Weekly

Table 18: Has the economy caused you to:

Table 19: Which three of the following are most important to you when shopping for food?

Table 20: In reaction to the economy, how have you changed the type of grocery products you purchase at the store? (all)

Table 21: In reaction to the economy, how have you changed the type of grocery products you purchase at the store? (by demographic)

Table 22: In reaction to the economy, how have you changed the way you purchase grocery products?

Table 23: % who have increased their coupon usage in reaction to the economy

Table 24: % who are visiting discount stores more often for food purchases, in reaction to the economy

Table 25: In response to the economy, are you doing the following…?

Table 26: In reaction to the economy, in which of the following ways have you altered your eating behavior?

Table 27: % Who Are Buying More Meals at the In-Store Deli

Table 28: How often do you shop from a grocery list?

Table 29: [of those that use grocery lists] When preparing a grocery list, do you typically include…

Table 30: [of those that use grocery lists] When preparing a grocery list, do you typically include…

Table 31: If upon visiting the store you found that the item in your grocery list cost more than you expected, what would you most likely do? (all)

Table 32: If upon visiting the store you found that the item in your grocery list cost more than you expected, what would you most likely do? [of those that typically include specific brands on their grocery list]

Table 33: If upon visiting the store you found that the item in your grocery list cost more than you expected, what would you most likely to do? (by demographic)

Table 34: When shopping for food & beverages, do you typically have a budget? (all)

Table 35: When shopping for food & beverages, do you typically have a budget? (by demographic)

Table 36: If you saw a really good price on a food product you wanted, which would you be most likely to do?

Table 37: If you saw a really good price on a food product you wanted, which would you be most likely to do? [of those that typically have a set dollar amount budgeted]

Table 38: These days, do you give greater consideration to discounted / specially-priced products?

Table 39: When comparing similar grocery products to determine the best price, do you typically…

Table 40: When comparing similar grocery products to determine the best price, do you typically…

Table 41: In reaction to the economy, to what extent have you reduced your purchases of the following?

Table 42: In reaction to the economy, to what extent have you reduced your purchases of gourmet food products?

Table 43: In reaction to the economy, to what extent have you reduced your purchases of name brand food and beverage products?

Table 44: In reaction to the economy, to what extent have you reduced your purchases of the following? (all)

Table 45: In reaction to the economy, to what extent have you reduced your purchases of the following? (by demographic)

Table 46: In reaction to the economy, to what extent have you reduced your purchases of the following? (by demographic)

Table 47: Which of the following products, if any, do you believe are worth paying more for?

Table 48: How much more would you pay for an organic or natural food or beverage product than for a regular one?

Table 49: Which of the following products, if any, do you believe are worth paying more for?

Table 50: When shopping for food and beverage products, how often do you purchase store brands? (all)

Table 51: When shopping for food and beverage products, how often do you purchase store brands? (by demographic)

Table 52: Over the past year, have your purchases of store brands

Table 53: Over the past year, have your purchases of store brands

Table 54: Which of the following types of store brand products do you currently purchase? (all)

Table 55: Which of the following types of store brand products do you currently purchase? (by demographic)

Table 56: % who believe store brands are equal or higher quality than name brands (all)

Table 57: % who believe store brands are equal or higher quality than name brands (by demographic)

Table 58: Generally speaking, how much less expensive would a store brand have to be for you to choose it over a national / name brand?

Table 59: For the following types of items, how much of a savings would be required for you to switch away from your current preferred brand to another product?

Table 60: How busy are you today compared to a year ago?

Table 61: How has the economy changed your visitation at each of the following?

Table 62: When eating at home rather than at restaurants, do you feel like you are “trading down”? (all)

Table 63: When eating at home rather than at restaurants, do you feel like you are “trading down”? (by demographic)

Table 64: Generally speaking, what is more appealing to you (in terms of taste, quality, etc.)?

Table 65: Generally speaking, do you find it to be more economical to…?

Table 66: Generally speaking, how would you rate the quality of products in the fresh deli, bakery, and prepared food areas of the store compared to those found in the regular aisles?

Table 67: Generally speaking, how would you say the price of products in the fresh deli, bakery, and prepared food areas of the store compare to those found in the regular aisles?

Table 68: Regarding products in the fresh deli, bakery, and prepared food areas of the store, with which of the following do you agree most strongly? (all)

Table 69: Regarding products in the fresh deli, bakery, and prepared food areas of the store, with which of the following do you agree most strongly? (by demographic)

Table 70: Over the past year, are you purchasing meals at the…?

Table 71: Compared to fast food restaurants, how would you rate the quality of meal items (sandwiches, etc.) available at the in-store deli of the grocery store…?

Table 72: Over the past year, are you purchasing meal items (such as pizzas and pastas) at the prepared food area of the grocery store…?

Table 73: Respondent Distribution

Table 74: In response to the current economy, would you say that your customers have significantly changed their purchasing behavior for food and beverage products?

Table 75: In which of the following ways have your customers changed their food and beverage purchasing behavior?

Table 76: Statement Agreement

Table 77: What of the following does your store plan to do over the coming year in response to the economy?

Table 78: Which of the following changes, if any, has your operation made with its in-store deli, bakery, or prepared food areas?

Table 79: Rate how well each of the following defines “value” in your mind.

Table 80: Which of the following methods of saving money on food purchases are very appealing to you?

Table 81: Which of the following do you use to discover good prices on food & beverage products?

Abstract

1) The New Value Shopper is EVERYONE. They are the typical consumer, not the exception.
2) Quality & Price Come First. Consumers want freshness with consistent quality at a good price.
3) The Search for Value Extends Beyond the Store. Comparison shopping & planning are key.
4) For Most, It’s Back to Basics. Shoppers are stretching their food dollar and making trade-offs.
5) Customers Value Honesty. They like national and store brands that offer honesty and value.
6) Store Brands are Growing Fast. Consumers see store brands as just as good in quality and taste.
7) Identify Core Customers. Identify loyal customers and use them as your foundation customers.
8) Have Both Short-Term and Long-Term Strategies. Do not lose sight of the future as you react to improve your operations in today’s economic climate. Keep the long-term prognosis and potential consequences of today’s actions in mind.

1) General Ways Consumers are Cutting Back (Gourmet Food, Single-Serve, Back to Basics, Organic and All-Natural Foods, Name Brands, Specific Categories, Meat/Poultry, Snack Foods, Juices & Sodas, Frozen Foods, Dry Staples, etc.).
2) Impact of Store Brands and Off Brands (Purchase Frequency, Purchase Trends, Attitudes about Store Brands, Demographic Impacts, Perceived Quality, Price Triggers, Impact for the Future).
3) At-Home vs. Away-From-Home Dining Trends (New Cooking Culture, Eating At Home is Not Perceived as Trading Down, Preference for Home-Prepared Meals, Economic Appeal of Eating at Home, Response from the Restaurant Industry, etc.).
4) Consumer Impact at the In-Store Deli and Bakery (Purchase Frequency, Visitation Trends, Special Occasion Buys, Cannibalization by the Aisles, At-Home Cooks, Financial Stability, Quality & Price Perceptions vs Packaged Foods, Acceptability of Premium Products, Meal Purchases at the Deli, Quality Perceptions vs Fast Food).
5) Solutions (Defining “Value,” Nuances of Value, Ways Shoppers Like to Save, Information Sources, A Framework for Developing New Value Strategies, Potential Tactics, What Consumers Want).

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