Are consumers being duped with ‘economy-size’?

Articles
January 06, 2009

Are consumers being duped with ‘economy-size’?

After the roughshod year consumers have had, some relief at the grocery shelf would be welcome. But look who they expect will provide it: the same CPG manufacturers that invoked price hikes repeatedly in 2008 when their own ingredients and transportation costs rose, yet didn’t lower prices once fuel expenses plummeted. Fat chance everyday food prices will fall. Nearly six in 10 U.S. consumers (58%) sense this, and tell Nielsen they are “very concerned” about rising food prices. They’ve taken action and deployed many savings strategies to cope. One of the most popular is buying multi-packs at wholesale clubs and splitting the contents at the car with another household.

After the roughshod year consumers have had, some relief at the grocery shelf would be welcome. But look who they expect will provide it: the same CPG manufacturers that invoked price hikes repeatedly in 2008 when their own ingredients and transportation costs rose, yet didn’t lower prices once fuel expenses plummeted.

Fat chance everyday food prices will fall. Nearly six in 10 U.S. consumers (58%) sense this, and tell Nielsen they are “very concerned” about rising food prices.  They’ve taken action and deployed many savings strategies to cope. One of the most popular is buying multi-packs at wholesale clubs and splitting the contents at the car with another household.

For example, two families shopping together might buy a multi-pack of four 32-ounce jars of pasta sauce, which they can keep fresh and apportion as needed, rather than a single 128-ounce jug that would spoil. This way, they share the savings and go home with only what they’ll actually use. 

Which is why another key finding of the recent Nielsen survey of 48,116 U.S. households seems puzzling. Nearly half of consumers (47%) say they would like CPG manufacturers to offer large economy sizes costing less per serving.

As appealing as lower portion costs seem, spoilage remains a great risk when people buy in bulk.  There’s also the difficulty of transporting and using such heavy packages without breakage, especially for older consumers. The bulk concept may make sense for pet food, cooler water or laundry detergent, but in our opinion at SupermarketGuru.com, it won’t translate well to the majority of supermarket categories.

With the holiday season behind us, people will quickly revert to buying only for their current household needs. Cash and credit are tight. People lack the money to buy bigger quantities on their own, often lack the space to inventory foods in their cupboards for months, and will soon question their own purchase decisions that potentially cost them in freshness, taste or nutrition.