NEW YORK — About one-fourth (24%) of consumers would shop for groceries at a cheaper store than they do today if food prices continue to rise, according to a survey released by Citigroup Global Markets here last week.
The study revealed that about 12% of consumers said that in the past year they have already begun shopping at cheaper stores.
The survey was conducted online in Washington state and Texas, where the three largest supermarket companies (Kroger, Safeway and Supervalu) all compete with both Wal-Mart and Target.
“If food prices continue to rise, we believe that we will see an increase in trading down, even to the point where more consumers decide to switch from their preferred supermarkets to lower-priced retailers,” wrote Deborah Weinswig, retail analyst at Citigroup, in the report.
More than a third (35%) of consumers said they have been spending less on “splurge” items, such as wine and chocolates, and 30% said they have been trading down to less expensive products, such as substituting chicken for beef.
Despite rising prices, about 23% of consumers said they had not changed their behavior at all. Those households with income of $75,000 or more were least likely to have changed their behavior, with 31% saying they have not done so.
In other findings, Wal-Mart was far and away perceived to be the price leader, with 72% of survey respondents saying it had the lowest prices, followed by 6.9% who said Kroger was cheapest and 6.4% who said Supervalu was cheapest. Safeway was cited as the most expensive.
“We believe these results show how strong investments in pricing at Wal-Mart and Kroger have impacted consumer perceptions,” Weinswig wrote.