CHICAGO, 2010 - American consumers plan to enter the 2010 summer season with a conservative spending mindset and saving strategies in their back pockets. Compared to a more optimistic outlook expressed by consumers in the summer of 2009, this year they are more apprehensive and are selectively keeping their wallets closed to “extras” and cautiously open for essentials, according to new research from the SymphonyIRI Group. As with the previous years of 2008 and 2009, consumers plan to maintain their strategic approaches regarding where, how and on what their money is spent this summer.
SymphonyIRI surveyed approximately 1,000 households about their 2010 summer spending rituals and discovered other shifts in consumer behavior, such as the increase in cooking meals at home, the variety of outlets where consumers plan to shop, and the continuance of bargain hunting this summer.
“Though the economy is beginning to show signs of improvement, consumers have hunkered down for the long haul and adopted savvy spending strategies to get them through what’s expected to be a long and potentially rocky economic recovery,” said Susan Viamari, editor of SymphonyIRI’s Times & Trends. “Results from this summer rituals survey fall in line with what we recently revealed in our Food Marketing Institute (FMI) Economic Update Survey, where 47 percent of Americans feel that their financial situation is worse this year versus a year ago. Moreover, 69 percent anticipate that their financial situation will be the same or worse a year from now. Logically, we’ve found that ‘extravagances,’ such as vacations, are one of the most heavily ‘cut’ items.”
New trends such as cooking more meals at home to save money and maintain a healthier lifestyle, while also promoting more quality time spent with family and relaxation, are positive side effects of this conservative spending mindset.
Saving Money and Creating Healthier Lifestyle Key Focuses of Cooking and Eating Habits
While there’s been a slight decline overall, saving money continues to be a key motivator driving people’s cooking and eating habits. Nearly three-quarters of consumers are cooking and eating in a manner that is designed to help save money. This is consistent across a majority of income brackets. However, those earning more than $100,000 are much less focused on cooking and eating to save money-only 58 percent of consumers in this bracket indicate that their cooking and eating habits are influenced by a need to save money compared to a range of 71-76 percent among consumers earning less than $100,000.
This aggressive money-saving strategy is well entrenched in today’s society and is likely to far outlast the economic downturn. The SymphonyIRI FMI Economic Update Survey found that 31 percent of consumers are purchasing CPG products that allow them to cook more meals at the lowest total cost. Additionally, 49 percent of Americans are cooking more from scratch and using less convenience items in order to save money. Nearly all of these consumers (93 percent) indicate that they will continue to do so even after the economy improves.
While those in the $100,000 households are less likely versus the general population and other income segments to cite saving money as an influence in their cooking and dining habits, they are more likely compared to the general population and other income segments to cite healthier lifestyle as a key influence. Higher-income households ($55,000-$99,999 and over $100,000) are also more likely compared to the total population and lower-income households to cite spending quality time with family as a key influencer of cooking and eating habits (41 percent and 39 percent, respectively). “Relaxing more” has also been cited equally across income groups this year as more of a motivator compared to 2009.
Shoppers Continue to Shift Where They Shop
Shoppers’ cost-conscious strategies will also affect where they plan to shop this summer. While shoppers will continue to shop at supercenters, such as Walmart Supercenters and Super Targets (25 percent in 2009 and 2010), consumers expect to increase shopping at mass merchandisers, such as Walmart and Kmart, club stores and dollar stores. Specifically:
- 56-67 percent of shoppers plan to continue their trips to mass merchandisers as they have in the past, with an average of 20 percent across income groups who say they plan to increase their shopping trips within this retail channel
- Across income segments, 12-18 percent of consumers plan to increase their trips to the club channel, with the lowest growth rate among shoppers earning $35,000 or less (12 percent) and the highest growth rate among shoppers earning $100,000 or more (18 percent).
- Trips to dollar stores are also increasing across income segments. For this channel, higher-income shoppers are showing stronger growth of 11 points versus year ago (9 percent in 2009, 20 percent in 2010), compared to 5 points in the lowest income bracket (32 percent in 2009, 27 percent in 2010).
- Trips to grocery stores and drug stores show a slight increase in expected shopper trips this summer compared to 2009 across all income segments.
Deals and Promotions Lure Even Wealthiest Shoppers to Stores and Brands
Forty percent of panelists surveyed said that deals and special promotions will have more influence in determining where they will shop this summer versus last year, and 42 percent said deals and special promotions will have more influence in determining what brands they will buy.
“The influence of deals and special promotions is fairly consistent across income segments,” said Viamari. “This underscores the degree of entrenchment into conservative shopping patterns where even the wealthiest consumers are heavily focused on deals. In fact, when it comes to brand selection, higher-earning households are even more heavily influenced versus the general population and lower-earning households.”
Consumers Plan to Spend More on Travel, Groceries and Entertainment When Economy Improves
As the economy improves and when consumers feel more comfortable opening up their wallets to non-essential expenditures, entertainment, groceries and travel are cited as the top three areas where they will splurge.
- 40 percent of the panel chose entertainment
- 39 percent of the panel chose groceries
- 37 percent of the panel chose travel