CHICAGOAfter a year of sluggish economic growth in 2013, it's no surprise that consumers are beginning the new year with a conservative outlook. Shopper sentiment dropped in Q4 2013, and has changed the way consumers shop, especially when it comes to food and beverage purchases, according to IRIs MarketPulse Survey.
The survey shows 83% of consumers are having difficulty affording their regular groceries. As a result, 49% of consumers are cooking from scratch more frequently and using fewer convenience items to save money.
The economy is slowly returning to a healthier state, but the road has been longer and harder than anyone expected, and it has been littered with obstacles," said Susan Viamari, editor of Thought Leadership, IRI. As a result, consumers are holding strong to the strategies that saw them through the worst of the downturn."
In addition, the gloomy attitude is spilling across all age groups. Millennials reported a 10-point decline since Q3 2013 and have consistently struggled since the economic downturn began.
A number of factors likely contributed to shopper confidence being shaken, such as the debt ceiling crisis (73% awareness), the rollout of Obamacare (75% awareness) and the conflict in Syria (90% awareness). In addition, the reduction of food stamp benefits, otherwise known as the Supplemental Nutrition Assistance Program (SNAP), will increase financial pressures for 48 million Americans.
Further, 39% of consumers feel their financial situation is worse today than one year ago, and 43% say their financial position is unchanged versus one year ago.
As a result of these ongoing difficulties, consumers will continue to trim expenses in more ways than by just reducing grocery bills: 53% are working to make personal care products last longer; 51% percent are finding ways to make cleaning products last longer; 40% are making beauty care products last longer; and 29% are sharing more products.
When making purchases, consumers also are demonstrating adeptness for saving that has been honed over the course of the downturn. For instance, 90% are eliminating unnecessary purchases, and 67% are making shopping lists prior to going to the store.
In 2013, IRI also reported consumers are tuning into health and wellness claims on food and beverage products. Growth trends indicate that a number of products with individual health and wellness claims experienced declining sales; however, evidence shows that products providing a holistic approach that advances general health and well-being are gaining market traction.