Food Shoppers Searching for Value

Recent surveys reveal a sharp change in consumer purchase patterns based on ongoing inflation.  According to Caleb Wilson writing in Food Business News: -

• Almost all (94 percent) of a group surveyed admitted to having changed spending habits this year. 
• Increased product prices have caused 70 percent of consumers to alter meal plans or to select alternative items.
• A high proportion (60 percent) of consumers are actively comparison-shopping.

Steve Markenson, Vice-president for Research and Insights at FMI, stated, “Shoppers are becoming increasingly savvy, flexible, very creative and prudent when it comes to food purchases.”  This sentiment is reinforced by the CEOs of Target and Walmart in recent investor calls. 

The search for value includes a high proportion of consumers purchasing private label items with a rise of eleven percent to $229 billion in 2022 compared to the year prior to the onset of COVID.  Shoppers are also changing their primary stores based on price. Among Generation Z (born 1995-2010), 27 percent reported that they had selected alternatives compared to three percent of Boomers (born 1928-1946) who are evidently more conservative.

Markenson also notes that the concept of “value” extends beyond price.  Depending on generation, consumers consider convenience, freshness, sustainability and welfare in addition to unit price.  Consumers are also considering wastage and are accordingly purchasing their requirements in smaller quantities, although this trend may be more influenced by budget considerations.  Affluent Generation Y (born 1977-1995) and Generation Z (born 1995-2010) are more likely to opt for what they consider as quality.  This may be based on earnings compared to Boomers who are more likely to place a higher value on price based on retirement income.  The take-home message from a variety of market studies segmenting consumers by age suggests that Boomers follow habit with respect to stores and products whereas Generation Y and Z shoppers are more willing to apply tradeoffs among a variety of attributes including quality and non-quantifiable considerations that represent their concept of “value”.