By now, we all know that the 2008 financial crisis made shoppers tighten their belts. Shoppers got creative with saving money, such as cutting back on specialty products, clipping coupons, or eating less meat.
Although the economy is slowly beginning to bounce back, it doesn’t necessarily translate directly to increased consumer confidence. In today’s webinar, Macro Trends and Benchmarks for Tracking and Improving Success in 2011, we discussed our findings about what was going on in shoppers’ minds from 2007 through 2010.
We found that many consumers had to start thinking harder about the money they spent, and even though their financial situations may have improved, many plan to continue the same money saving behaviors because having that extra bit of money saved is satisfying. On the other hand, others are still concerned and feel forced to continue cutting back, leading to feelings of depression, stress, and anger at the government.
One way shoppers are cutting back at the grocery store is to opt for private label as opposed to brand name goods. While some people find the private labels to be reasonable substitutions for their brand name counterparts, it makes others worry about not being able to provide for their family in the manner to which they were accustomed. Regardless, the private label trend has continued to rise steadily each year since 2008.
These same consumers were also very price conscious of their gas usage as well, limiting driving and planning routes to multiple destinations in advance to minimize mileage. They were also putting preventative health on the back burner and dealing only with the issues that were immediately pressing.
On the other hand, stores are sensing that now is the time to expand. For example 7-Eleven is targeting 100 new stores in New York City, Wegman’s is opening its first New England store and the Dollar General will open 625 new stores in 2011. Many of these retail giants are also downsizing the format of their stores. Target is joining in on this trend, and its new store in San Francisco will be half the size of the average SuperTarget.
Although they’re opening new stores, these retailers are certainly responding to the way their customers are shopping. Higher gas prices are making people want to take fewer trips to get their weekly chores accomplished. Retailers such as CVS, Walgreens, and Target have started offering food in their stores—even sushi.
The fact that consumer confidence still doesn’t meet pre-2008 levels is evident as shoppers pull back across all channels, and most channels realized a decrease in 2010 spending levels. Shoppers are also spending slightly less per shopping trip overall. But, by shaping their formatting to the ways that consumers are shopping today, retailers will continue to be able to reach their shoppers as confidence bounces back.
by Andrea Richards, Senior Vice President, Quester
