Consumers Remain Frugal Despite Economic Upturn
NEW YORK -- Things may be looking up on the economic front, but wary consumers still plan to remain cautious.
According to Deloitte LLP’s 2013 American Pantry Study, 94 percent of Americans indicate they will remain cautious and keep spending for food, beverage and household goods at current levels.
Ninety-two percent of consumers surveyed indicate they have become more resourceful and 86 percent say they are getting more precise in what they buy -- attitudes that have remained consistent in the three years Deloitte has conducted the study.
Despite the continued tightening of their purse strings, 72 percent of consumers indicate that even though they are spending less on household and grocery items, it doesn't feel like they are sacrificing much. This marks a 7-percent increase compared to two years ago.
The survey also found that private label brands have come out ahead. Eighty-eight percent of survey respondents report they have found several store brands they feel are just as good as national brands. In addition, only 27 percent plan to switch back to national brands as the economy rebounds, an 8-percent decline from the previous year.
"One of the most notable year-over-year trends in the study is how embedded frugality has become due to the recession," said Pat Conroy, vice chairman and consumer products sector leader at Deloitte LLP. "Prudent consumers and improving perceptions about store brands are squeezing national brands' position. The gap between the few 'must-have' brands on shoppers' lists and others on the shelf may be widening, making it more important for brands to differentiate through innovation, quality and performance. Consumer product companies may also consolidate low- and mid-level performers and shift investment to the category leaders."
According to the survey, brand loyalty dropped for the third consecutive year. When asked why certain brands are no longer a priority for their households, consumers cited "other brands are available on sale" as the No. 1 reason. However, brands to which consumers are most loyal significantly outpaced their lower performing counterparts by 20 or more percentage points on attributes such as performance, experience and trust.
In addition, 84 percent of consumers say they have a specific set of brands in mind and will purchase whichever one is on sale. When using coupons, 71 percent indicate they will use them only for items they would have purchased anyway.
Shoppers are also selective about the retail channels where they are willing to purchase certain items. Consumers surveyed shop an average of 2.5 channels in each product category, compared with an average of 5.5 channels (including grocery, mass merchandise, club, drug, convenience, dollar, neighborhood market and online) for all of their food, beverage and personal goods combined, according to the survey.
Loyalty cards' importance in consumers' cross-channel shopping has increased, as the number of consumers with three or more grocery loyalty cards has grown from 28 percent in the first American Pantry Study in 2010 to 39 percent in the most recent survey.
The 2013 American Pantry Study was commissioned by Deloitte and conducted online by an independent research company in January. The survey polled a sample of 4,047 consumers and has a margin of error of plus or minus two percentage points.