Rich Man, Poor Man and the Recessionary Impact on Shopping Behavior

As the recession intensified in the U.S., value retail channels (i.e., dollar stores, warehouse clubs and supercenters) continue to win shopping trips – particularly from more affluent shoppers.  During the second half of last year and through the first (4-week) periods of 2009, these three retail channels drove stronger year-over-year trip growth than the grocery, drug and mass-merchandiser retail channels. 

Note: Click on graphics and they will expand.

More affluent households (incomes of $70K +) were shopping the grocery channel  more often and account for the largest share (42%) of total basket ring dollars versus middle income ($30 to $69.9K) and low income (less than $29K) households.  For the past 11 periods, affluent households  posted trip growth in every period, while grocery trips by middle income households were about flat and grocery trips among low income households were off in all but two periods.

While many grocery retailers followed the success of Save-A-Lot’s meal deals with their own higher- priced version, these findings suggest opportunities beyond a series of me-too offerings.  How about stepping up activities for on- line recipes, in-store cooking demonstrations and cooking classes in stores serving more affluent consumers?  In a April 2009 Nielsen Homescan survey, 50% of adult consumers with incomes of $70K + stated they were eating out less to save expenses – four percentage points higher than the 46% rate for all adults.  

Affluent households drove faster trip growth in supercenters, warehouse clubs and dollar stores too,     but their overall importance to the sales in each channel ranged from a low of 20% for dollar stores to a high of 58% for warehouse clubs.  Here too we see opportunity to use different assortment, pricing and promotional programs targeted to the “shopper income” draw of a particular store.  And while value messaging needs to be prominent in these tough times, it can’t all be about low prices!

For further information or to arrange a comprehensive presentation on consumer shopping patterns, please contact Todd Hale at 859-905-4615.

- Todd Hale, TheShopperWonk

- todd.hale@nielsen.com

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