Will delayed retirements change food shopping?

Articles
October 18, 2011

Will delayed retirements change food shopping?

Older adults will stay in the workforce as long as they can. They may plan their food-store trips, but 90% lack a written retirement plan.

America today is a land of two retirements – the forced early ones when companies downsize and the deferred ones that never seem to come because people feel they must work in order to sustain their households.

Neither appears to be good news for supermarkets, since both encourage shopper mindsets to save rather than spend, and to be utilitarian rather than indulgent.  Food store operators that serve Baby Boomers and seniors should market to them with an understanding of the financial pressures they face, and the way these pressures might alter their food buying and consumption decisions.

The title of the 12th Annual Transamerica Retirement Survey, The New Retirement: Working, says it all. “For many Americans,” the report concluded, “the foundation of their retirement strategy is simply not to retire, to work considerably longer than the traditional retirement age, or work in retirement.” Here are the hard figures:
•    39% plan to work past age 70 or do not plan to retire
•    54% expect to plan to continue working when they retire
•    40% expect to work longer and retire at an older age since the recession

Why? They fear outliving their savings and investments and being unable to meet their family financial needs. That doesn’t sound like they’ll be growing their food baskets much or even necessarily sticking with conventional supermarkets – especially since Costco, a low-cost food resource, was just able to push through a price raise in its annual membership. People still see the value there, says F3.

More than 4,000 American workers surveyed by Transamerica cited a huge financial gap that they expect would keep them working:
•    Their median estimate of retirement savings needs to feel financially secure is $600,000, yet fewer than 30% have saved more than $100,000
•    Most workers, regardless of age or household income, agree they could work until age 65 and still not have enough money saved to meet their retirement needs
•    Nearly one-third (31%) anticipate they’ll need to financially support family members

It is well documented that shoppers increasingly plan their store trips, but planning retirement appears to be beyond most Americans. The Transamerica figures show that:
•    56% say they have a retirement strategy, but just 10% have a written plan
•    Fewer than one worker in five (19%) has a backup plan for retirement income if they’re unable to work
•    Few have a good understanding of government retirement-related benefits such as Social Security (40%), Medicare (28%) and Medicaid (23%)

And the work goes on: only 10% are very confident in their ability to retire comfortably. Only nine percent strongly agree they’re building a large enough nest egg.

This malaise could affect the food-spending rate among younger adults as well – since the majority of workers of all generations agree they could work until age 65 and not save enough for retirement, the study shows. Add in the angst from current economic data, a shaky stock market, depressed housing values, high unemployment – and we believe there’s enough fear about the future to depress spending.