ORLANDO, Fla. — Shoppers may have been clipping coupons and looking for bargains more often during the past two years, but their preference for supermarkets as the best place to purchase meat and poultry remained strong. And, as the economy improves, meat departments continue to offer retailers opportunities to build shopper loyalty.
These were a few of the top-line insights of “The Power of Meat: An In-Depth Look at Meat through the Shopper's Eyes,” an annual consumer survey sponsored by the American Meat Institute, the Food Marketing Institute and Cryovac, a division of Sealed Air Corp. The research was unveiled here last week in a presentation by research consultant Anne-Marie Roerink at the 2010 AMI/FMI Annual Meat Conference.
The recession has fundamentally changed the food landscape, impacting where customers shop and how they shop. But, different consumers have reacted to these economic pressures in different ways.
In this year's survey, 41% of respondents said they were spending about the same amount of money at supermarkets as they have in the past. Thirty percent said they were spending less by applying money-saving measures, such as using coupons or buying more products on promotion, and 20% said they were spending less because they were purchasing less food. Nine percent, however, said they were actually spending more at their supermarket, because they had cut back on dining out.
Based on these responses, Roerink said that shoppers can be divided into three broad groups. The first group has experienced minimal disruptions to their household income during the past two years, but may have become more cautious with their spending. So, they're cutting back on eating out or looking for ways to save money when they eat out, by choosing less expensive restaurants or splitting appetizers and desserts, for example.
These shoppers tend to be really interested in meal solutions at retail, and if they are eating at home more often, they may still be interested in higher-end cuts, to replicate those dining-out experiences.
The second group consists of customers who are looking for ways to spend less by employing strategies such as increased coupon use, sticking to shopping lists, looking for items on special or switching to private-label brands.
The third group Roerink described are those who have been hardest hit by the recession. Many in this group have been forced to make more drastic efforts to save money, such as buying less food overall for themselves and their families. This group is also the most likely to switch primary stores or formats to find better deals.
“There's a huge difference in people who have to save because they lost money, and people who choose to save because they're being cautious,” noted Roerink.
The net result — despite some trading-up activity among higher-end consumers — has been that average spending per supermarket trip declined from between $94 to $95 in recent years, to $92.60 in this most recent survey. Average trip frequency also fell to below two trips per week.
Fortunately for meat departments, dollar sales declines can largely be attributed to price deflation and trading down behavior during recent months. Chicken, beef and pork volume were all up, but prices were down, and many shoppers were drawn to less expensive items.
And, this situation appears to be stabilizing. Forty percent of respondents in this year's survey said that they had changed their meat and poultry purchases due to the economy, down from 51% in the prior “Power of Meat” survey. Of these shoppers who said they were changing their habits, 78% said they had been reading store advertising more often, 74% said they had been stocking up on meat and poultry when it was on sale, and 73% said they were paying more attention to price per pound, rather than package price. Only 20% said that they were buying or cooking meat less often.
“We're seeing meat and poultry purchases normalize a bit compared with other items in the store,” said Roerink.
And, meat continues to be one of the few products that can lead a shopper to choose one store over another, noted Roerink. This is crucial, since supermarkets have continued to lose overall share to supercenters and warehouse clubs, but a significant majority of all shoppers continue to prefer buying meat and poultry at supermarkets.
For example, 61% of respondents said that a supermarket is their primary store, while 32% said they do most of their shopping at a supercenter, 4% said a warehouse club, 1% said they prefer natural and organic stores, and 2% chose “other.” However, 68% of respondents said that supermarkets remain their primary store for meat and poultry. And, among those respondents who said that a supercenter is their primary store, only 60% said they also buy meat and poultry at that supercenter.
This year's survey also found that bulk products may be an emerging opportunity due to the recession. Roerink said that during the past four years, there was about a 50%-50% split between respondents who said they might consider purchasing bulk products if it would help them save money. By contrast, in this year's survey, 60% of respondents said they would consider purchasing in bulk. However, Roerink added that bulk items do not tend to appeal to lower-income shoppers, who generally have less money to spend per shopping trip.
And, natural and organic meats seem to have survived the worst of the recession, despite their price premium. The category did not grow much during the past year, but it did not crash, either, noted Roerink. Increased availability appears to be one reason, she said. But also, natural and organic buyers are loyal shoppers who will often make sacrifices in other areas of their spending before giving up organic food purchases.
Forty-six percent of these shoppers said they buy natural and organic because they believe it offers positive long-term health effects, 43% said they believe it has better nutritional value than conventional meats and 38% said they are willing to pay a price premium because natural and organic claims ensure better treatment of animals.