Consumer Purchasing Trends Shift in Response to Changing Economy

Ipsos Research Results Can Help You Shift Your Strategy to Make the Most of Beef Merchandising Opportunities

Posted to BeefRetail.org in conjunction with January 2009 issue of Retail Beef Blast.

As retailers try to gauge the impact of the economy on their businesses, new research helps explain ways your meat case might be affected by rising prices and shrinking budgets. An August 2008 study by Ipsos surveyed primary household shoppers about how economic pressures are affecting their food choices and shopping strategies. Of the adults surveyed who reported that supermarket prices had increased during the prior 6 months, 61% were indentified as "price sensitive" because they changed their shopping habits as a result of rising prices.

Two adjustments that price sensitive shoppers are likely to make at the meat case are:

• Buy less expensive cuts and/or buy smaller packages.
  • Approximately 48% of price sensitive consumers fall into this category.
• Reduce or eliminate purchases of certain types of food.
  • Approximately 39% of price sensitive consumers fall into this category.

Because beef gives consumers so many options in the meat case, they are still able to enjoy delicious cuts of beef, but they may choose cuts or packages that are a greater value. Price sensitive consumers report that they are purchasing steaks and roasts less; some say they are cutting back to eating steak once a week or less. According to the beef checkoff-funded Consumption Tracker Data for November 2008, of the people who report eating less steak and roast, price is cited as the top reason.

Price sensitive consumers are also more likely to have made other changes in their purchasing and meal planning, including:

• Eating out less/cooking at home more
• More careful meal planning
• Purchasing less expensive food/cutting meal costs
• Cutting back on purchases of perceived luxury items
• Buying more store-brand items
• Using more manufacturers' coupons
• Buying sale items and freezing
• Eating more leftovers
• Making recipes that use less expensive ingredients

If you anticipate these changes in shopping patterns, you can adjust your merchandising plans to help consumers stretch their food dollars and continue to keep beef at the top of their shopping lists. Here are some effective strategies to keep your customers buying beef in your meat department:

• Take advantage of the eating-in trend:  Consumers eating at home more often, and the wholesale price update shows us that wholesale prices for middle meats have been lower recently. This intersection of trends gives you an opportunity to feature middle meats and keep profit margins high, while your customers who are seeking delicious steaks find what they're looking for in your meat case. See related article for more tips on "Winning Shoppers in Turbulent Times".
• Promote the versatility and convenience of ground beef:  Ground beef helps your customers get the most for their beef dollars and offers a wide variety of meal solutions, from burgers and tacos to pasta dishes and casseroles. Sales data from FreshLook Marketing indicates that consumers are turning to ground beef more. Pound sales of the ground beef category for the 13 weeks ending 10/26/08 were up 9.5% and up 3.9% for the year. A look within the category shows that this growth is primarily in the 78-84% Lean and Ground Chuck segments. Refer to the Ground Beef section of the Beef Recipes & Photography section for lots of mouth-watering photos and delicious recipes to help you remind your customers about ground beef's versatility and convenience.
• Offer diversity in the beef case:  As you know, beef offers a variety of choices; make sure you stock your meat case with attention to variety. Give extra attention to cuts and package sizes that will be perceived as a greater value by price sensitive shoppers. Smaller packages as well as larger family packs are both good options.
• Remind your customers of the health benefits of beef:  Price sensitive consumers who may consider purchasing less beef are also more likely to have nutritional concerns about their diets. Visit Nutrition Central for all the information you need to effectively communicate the messages of beef nutrition to your customers. A good starting point is the "Twenty-Nine Ways to Love Lean Beef" wallet card; download and print this resource for your customers.
• Try new marketing ideas:  Increase coupon and meal deal promotions and promote private label offerings. Refer to recent issues of Beef Fast Facts for merchandising tips to share with your store associates; the issue is filled with ideas to help you help your customers save time and money while preparing delicious and nutritious beef meals for their families.
• Offer Beef Value Cuts and Chuck Roll Cuts: To appeal to those consumers who might think they have to reduce steak purchases, show them there are several steaks that are tender and delicious and still at a great value. Stock Beef Value Cuts and Chuck Roll Cuts in your case to keep your steak lovers satisfied.