Consumers still shop cautiously

Unfortunately for Supermarkets, many consumers are still feeling the pinch on their purse strings, and until they feel better about their ability to spend, retailers could have trouble seeing big growth.

Unfortunately for Supermarkets, many consumers are still feeling the pinch on their purse strings, and until they feel better about their ability to spend, retailers could have trouble seeing big growth. And, it could take a while. Allstate Insurance released a study earlier this year that said, “more than four in 10 Americans live paycheck to paycheck, and nearly one in 10 doesn’t earn enough to pay for essentials,”. A new Nielsen consumer survey points out the cumulative effect that many factors have on food/household/HBC spend. Through 2013 so far, 64% of U.S. households say they feel pain from rises in food prices, 58% gas prices, 40% utility/energy bills, 30% healthcare costs, and 23% the payroll tax hike. All of these factors but the last affect lowest-income households (under $25K) to a far greater extent. But, according to Nielson, households at both income extremes, react the same way to rising food prices. 66% seek out deals, live on a tighter budget, and buy fewer items they don’t need. So, no matter what income level retailers are appealing to, it might be worth remembering that the majority of people are looking to save. Now is perhaps the time to remind customers of store brands that offer a less expensive alternative. Setting up displays to show shoppers how to incorporate certain cost-saving brands into their cooking and taste tests for goods on sale are great ways to remind customers how to cut costs.