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Price perceptions impact holiday food spending

As consumers seek to economize, Daymon report cites opportunities for private label

A large majority of consumers have a lingering perception that grocery prices are higher than they were a year ago, which is leading them to seek more bargains this holiday season, according to the 2023 Holiday Expectations report from Daymon.

The report found that for the 88% of shoppers who perceive food prices as being higher than last year, 91% will be changing their purchasing behaviors in some way. This represents an opportunity for retailers to promote their private brand offerings, the report suggested.

Daymon, a global private brand agency, said more 75% of consumers surveyed said they are not willing to buy smaller quantities of items, and instead are buying private brands (94%), seeking deals (66%), shopping across more stores (44%), and comparing prices online (31%). More than four in five shoppers — 82% — said they are not loyal to national brands for holiday recipes, amplifying the opportunities for private brands, the report concluded.

“With consumers looking to price compare and shop across more stores in search of deals, retailers should align strategies throughout the path to purchase with in-store and online marketing initiatives communicating both savings and the overall value private brands provide across key holiday categories,” the report concluded.

Shoppers are also seeking to economize on their holiday entrees, with 20% reporting that they plan to buy a more affordable meat this holiday season, compared with 10% who said they expect to buy a more premium meat.

Many consumers are also prioritizing convenience when it comes to ready-made meal components for the holidays, the report found. The most popular options are ready-to-eat desserts (36%), appetizers and sides (25%), prepared entrees (21%), and store-made gravy, sauce, or dips (21%).

Among the report’s other findings:

  • Gen Z will shop online: Perhaps not surprisingly, younger consumers are nearly four times as likely to say they will conduct some of their food shopping online, the report found. While 46% of shoppers overall said they plan to use click-and-collect services to buy holiday groceries, 79% of Gen Zers said they plan to do so, compared with 23% of baby boomers. Ordering online for home delivery saw a similar disparity, with 68% of Gen Zers planning to do so, vs. 19% of boomers
  • Friendsgiving is popular with young consumers: The report also found that Friendsgiving, a holiday gathering apart from traditional family, has become mainstream, particularly among Gen Xers and Millennials. In fact, more Gen Zers said they host Friendsgiving than they do Thanksgiving. “This translates to more opportunities for gourmet charcuterie, prepared store foods, and unconventional dishes,” the report concluded
  • Food gifts will be popular: The report found that food items were among the most popular categories for gift-giving this year. This includes items like holiday gift baskets that are experiential, often filled with treats and favorite confections, according to the report. Other categories that will garner more consumer spending this year include apparel, gift cards, and toys/games
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