Driven by optimism over the labor market, job stability, personal finances and gas prices, shopper sentiment surged in the first quarter of 2015, according to the IRI MarketPulse™ survey. The surge, which spanned all age groups and all of the measures that comprise the index, marked the largest jump in IRI’s Shopper Sentiment Index™ since it was launched in 2011.
The index measures how the economy is impacting consumers and changing how they approach grocery shopping, and provides perspective in terms of price sensitivity, brand loyalty and changes in spending required to maintain desired lifestyles. With a benchmark score of 100, a Shopper Sentiment Index score of more than 100 reflects consumers who are less price driven, more loyal to favorite brands and better equipped to maintain their desired lifestyles without changes as compared to 1Q2011.
With a 1Q15 Shopper Sentiment Index of 138 compared with 120 in 4Q14, consumers definitely have a sunnier outlook and feel more confident. And millennials, in particular, are feeling more financially secure and optimistic with an index of 131 in 1Q15 compared with 114 in 4Q14 and 95 in 3Q14. Millennials have struggled since the economic downturn began and have generally indexed the lowest among consumer age-based segments. However, the 1Q figures are the highest index levels for millennials since the inception of the index.
Overall, one-third of millennials feel the economy has improved in the last six months, and 28 percent expect even more improvement in the next six months. Still, 25 percent of millennials are having difficulty buying groceries, compared with 20 percent of the total population. So, it’s no surprise that deal seeking continues to rise among millennials, with 26 percent saying they buy more on deal today than a year ago. Among this cohort, 30 percent say that more than half of their most recent shopping basket was bought on deal, which is comparable to the total population.
It’s not just millennials who love a bargain. More than one-quarter of consumers estimate that 50 percent or more of their most recent basket was bought on deal, compared with 34 percent in 1Q14. Consumers are still following money-saving strategies including making shopping list before entering the store; looking at circular before or at the store; stocking up on certain items because they’re on sale; seeking out and buying store brands to save money; and selecting products to create more meals at lowest total cost.
“CPG marketers should find relief in the continued improvement in shopper attitudes, but sharp withdrawal of value-focused programs would be a mistake," said Susan Viamari, editor of Thought Leadership, IRI. “Conservative mindsets still prevail and, in the near term, purchase behavior and loyalty will be strongly influenced by products and programs that meet or exceed consumers’ expectations for great quality and strong results at a reasonable price-point."