Just When You Think You Understand Consumer Behavior
Shoppers and Trends
May 25, 2009
Recently, Target Corp. announced that it will introduce a mini grocery store concept to 100 new and remodeled stores this year. The main feature of these mini grocery stores will be fresh foods, as well as a limited assortment of other groceries. And last week the Organic Trade Association (OTA) released information from their Annual Survey. According to OTA, organic sales have increased by 15.8% and reached $22 billion. Moreover, organic food sales account for approximately 3.5% of all food product sales. All very interesting developments, and certainly as a result of a consumer base responding to the desire for “eating healthy.”
The 2010 Dietary Guidelines Advisory Committee held a meeting recently in Washington, D.C. As reported by the Food Institute, a panel of experts discussed information regarding the effects of poverty on food consumption and research that focused on food and nutrition choices by consumers. Additionally, there was discussion on the potential impact on the environment as a consequence of shifting food choices by consumers. Let’s take a look at some of the comments and observations of these experts.
Dr. Adam Drewnowski from the University of Washington noted that as food costs increase, consumers do not eat less, but purchase cheaper foods that often have fewer nutrients and higher energy density. Dr. Drewnowski also noted that simply advising people to avoid added sugars and fats, or limiting access to low nutrient foods, will not improve diets. He concluded his remarks by asserting that environmental factors such as economic or physical access to more nutritious products often greatly impacts food, and healthy food choices. Clearly, this is an area that retailers have responded to quite well and look to improve through technology and store design.
As a follow-up to Dr. Drewnowski’s presentation, Dr. Michael Hamm from Michigan State University discussed the relationship between the Dietary Guidelines and the sustainability of the food supply. His remarks were a real head turner. According to Dr. Hamm, if all Americans were to follow the current guidelines for the consumption of vegetables, the current U.S. vegetable production would be 13 million acres short of demand. Additionally, California’s vegetable production is likely to decrease in the next 20 to 30 years. Well, this turned the food pyramid on its side, and is another reason we need to continue to work with and listen to companies like Monsanto – they continue to make improvements in the productivity in food production.
Dr. Hamm’s presentation was then followed by Dr. Brian Wansink from Cornell University. Dr. Wansink shared with the group that controlled studies in supermarkets showed that only 12% to 22% of shoppers actually read nutritional labels. He was followed by Dr. Crawford of the University of California at Berkley who stated that theDietary Guidelines are too complex for consumers. Crawford recommended the creation of a national set of benchmarks and standards in the development of wellness guidelines.
These presentations demonstrate that there is a great deal of information available on consumer behavior. Some of it is puzzling, some confusing, and in many instances, much of it is conflicting. As reported in N.G.A.’s weekly newsletter, Express Lanes, independent retailers continue to see nice comparative store sales increases. But retailers are seeing changes and the statistics don’t lie. We are seeing a bigger increase in comparative store sales increases in the beginning of the month, with a relatively steep decrease in comparative store sales at the end of the month. In conversations with many independents, they assert that the unemployment numbers are driving up the number of consumers on public assistance – which creates the spike in the beginning of each month, as that is the time period for the allocation of food assistance type programs.
These sure are interesting times, and we need to continue following consumer behavior and shopping trends on a frequent basis.