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    Pumping Up Grocery Sales

    American consumers are spending savings from lower prices at the gas pump at the grocery store, ahead of putting money into savings and paying off credit cards.

    Nearly half of American consumers (48 percent) say they are spending savings from lower prices at the gas pump at the grocery store, according to a national survey by the retail analytics firm Precima. Groceries topped the list, ahead of putting money into savings and paying off credit cards.

    Of the 3,013 consumers who were asked to choose from a list of ways they use money saved on gas, 48 percent said they're spending it on groceries, followed by saving (42 percent). Thirty percent of those surveyed said they are using the savings at the pump to pay off credit cards. Since mid-July 2008 when the price of gasoline hit a record high over $4 a gallon, prices have dropped 57 percent.

    The gas-to-groceries switch is even higher in certain key sectors. Among those survey respondents who said they've suffered a direct financial loss during the recession, 55 percent said they're spending gas savings on groceries, and for those whose annual income is under $35,000 the number is 59 percent.

    Conversely, 34 percent of retirees said they're spending gas savings on groceries.  The number fell to 29 percent for those whose annual income exceeds $100,000.

    "Clearly this is a silver-lining for grocers in the economic dark cloud," said Brian Ross, general manager of Precima. "With relief at the pump, consumers are returning to some of the aisles they may have foregone in recent months. This significant trend builds on findings we uncovered in earlier research that showed that consumers are now eating more at home. These trends present real opportunities for grocers who target their strategies to meet the needs of cash-strapped consumers."

    In another significant finding from the survey, nearly two-thirds of respondents said the recession is changing the way they plan their grocery trips, particularly in regards to pantry-loading. No less than 27 percent of consumers said they can no longer afford to stock up on food and now buy only what they need week to week.  Another 35 percent said they stock up more than they used to, but only when items are on sale.

    Survey takers were asked about the factors that drive their choice of grocery stores. When queried about the grocery category most likely to make them switch supermarkets to get a better price, the results were as follows:
    * 76 percent fresh produce
    * 72 percent meat and seafood
    * 71 percent dairy

    The other switch-store choices included paper products (62 percent), canned foods (55 percent), snacks-beverage-candy (53 percent), convenience foods (41 percent), deli (39 percent) and baby products (15 percent).

    Precima's online survey of 45,000 households was conducted between Nov. 28 and Dec. 8, 2008 by ICOM Information & Communications.

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