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While the economy -- and consumer confidence -- may slowly be bouncing back, as evidenced by a gradual increase in “moderate discretionary spending,” the recent economic downturn has drastically altered the way people shop, according to James Russo, VP of global consumer insights for The Nielsen Co., who addressed retailers attending “After the Recession: Positioning for 2010,” an event hosted by The Gourmet Retailer and Forty One Madison in New York late last week.
This change was no surprise. In fact, consumer behavior changed almost exactly as they said it would when surveyed by Nielsen in October: spending less on clothes and out-of-home entertainment and meals, conserving energy at home, switching to cheaper or private label grocery brands, and changing their drinking venues from a bar or restaurant to their homes.
“Not surprisingly, value channels such as supercenters, online retailers and club stores are driving shopping trips,” said Russo. “And spending focus has shifted from ‘What do I want?’ to ‘What do I need?’”
As a result, certain categories have experienced growth during the recession, while others took a hit. Sales of food preparation and storage supplies (such as resealable microwavable bowls) have grown 14 percent, for example, while organics, which peaked at 24 percent year-over-year growth, are now almost flat at 1 percent. Off-premise wine sales are up 7 percent, with spirits following, up 3.2 percent. And store-brand sales have jumped 5.3 percent compared with branded products, which saw a 4.4 percent drop in sales.
“Consumers are spending more time at home, and this is reflected in their purchases of consumables,” said Russo. “And restraint is the new mantra.”
And this is the key to thriving during this recession, according to Russo. As consumers look for more ways to enjoy themselves in the home and stretching their dollars, those retailers meeting these needs will reap the benefits as the economy improves.