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Food the most popular item on which American consumers are spending their savings from lower gas prices, before putting the money in savings, holiday gift buying and paying off credit cards, a nationwide research from retail analytics firm Precima has discovered.
Of 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), holiday gift buying (37 percent), paying off credit cards (30 percent), entertainment (10 percent), and other (14 percent).
Gas prices have plummeted 57 percent since mid-July, when they reached a record high of more than $4 per gallon at the pump.
Among respondents who said they've suffered a direct financial loss during the recession, 55 percent said they're spending their gas savings on groceries, while the same held true for 59 percent of those earning under $35,000 a year.
By contrast, 34 percent of retirees said they're spending gas savings on groceries, and only 29 percent of those with annual income over $100,000 are doing so.
"Clearly this is a silver lining for grocers in the economic dark cloud," said Precima general manager Brian Ross. "With relief at the pump, consumers are returning to some of the aisles they may have forgone 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."
The survey additionally found that almost two-thirds of respondents said the recession is changing the way they plan their grocery trips, especially in regard to pantry loading. Twenty-seven percent of consumers said they can no longer afford to stockpile food and now buy only what they need on a weekly basis. Another 35 percent said they stock up more than previously, but only on sale items.
Of the 65 percent of respondents who said their stocking habits have changed, 5 percent said they stock up more, 54 percent said they stock up only on sale items, and 41 percent aren't stocking up any more.
"Given the importance of winning the stock-up trip in key center store categories, this is a clear call to retailers to look at pricing and promotional strategies for these items," noted Ross.
When asked about the grocery category most likely to make them switch supermarkets to get a better price, 76 percent of survey participants said produce, 72 percent said meat and seafood, and 71 percent said dairy. Among the 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 Nov. 28-Dec. 8 online survey of 45,000 households was conducted by ICOM Information & Communications. The survey is compiled from 3,013 respondents, 2,862 of whom are drivers. Respondents are nationally representative of U.S. grocery shoppers.
Toronto-based Precima is an advanced analytics firm that translates retail customer data into critical insights to better align marketing, merchandising and operations strategies with shopper needs.