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(HealthNewsDigest.com) – The current economic turmoil will have a marked effect on our nation’s food supply and possibly our shopping habits for years to come. For those who suffered through the Great Depression of the 1930’s, frugality became the order of the day. We may be heading there again. Food purchasing patterns, usually immune to economic downturns, have not escaped our current lousy economy.
In the first quarter of 2009, Americans reduced their overall food purchases by 4%. This was the largest quarterly price adjustment since the Bureau of Economic Analysis started tracking food prices in 1947. Hit by soaring food prices in 2007 and 2008 because of record increases in agricultural commodities, Americans suddenly started to take notice of everyday food prices. Then the economic meltdown in the fall of 2008 hit with a second shock wave that has yet to recede. Weekly grocery shopping is being challenged by stagnant wages, record job loses and unstable finances.
Suddenly making coffee at home seems wiser than a $4 latte on the way to work. Dining out less, cutting back on costly niche brands, switching to cheaper store brands, and buying less organic food is the new smart and trendy way to shop. This is an uncharacteristic shift in our food purchasing practices that has never been seen during any other post-World War II recession. Even teenagers reduced their out-of-pocket food buying in the spring of 2009 compared to 2008.
Are these trends simply a reaction to the current difficult economic conditions? Will consumers return to old buying habits when the economy improves? Or is this a long-term change in our consumer purchasing behavior?
As one would guess, the experts are divided about how consumers will react in the future. Some believe that when recovery happens Americans will return to their pre-2008 exuberant food-spending ways – bring back the lattes, organic wines, artisanal cheeses and expansive brand development. Others say, no. The financial scars, this time around, may be too deep and lasting, making recovery last for decades. A number of recent consumer surveys and current buying behaviors point to a more frugal shopper for a long time to come.
When it comes to grocery shopping today, trading down and a returning to basics is far more evident than trading up and buying pricey, value-added national brands. Wal-Mart with its price-driven strategy is close to selling Americans $1 out of every $4 spent on groceries and its market share will continue to grow as it attracts higher income shoppers. Private label and store brands grew 5 times faster than national brand name foods. Wal-Mart’s Great Value store brand is currently the largest selling brand in the nation and Kroger’s store brand makes up 35% of all brand purchases for the chain.
Consumers may be shunning costly restaurants and pricey take-out selections, but they aren’t cooking. We still buy much of our food ready-to-eat. But, even here we see the trade-down effect. House brands and supermarket deli counters are doing a robust business as are fast-food chains with dollar menus and foot-long sandwiches. Women have suffered only 20% of the current job loses, while men have accounted for 80%. Busy working women in cash-strapped households are more likely to turn toward inexpensive, fast, ready-prepared food options – burgers, pizza, tacos, and barbecued chicken fill the bill. The USDA predicts that by 2011 out-of-the-home food purchases will equal the amount of money spent on food at home.
Starbucks is closing stores but Dunkin’ Donuts is expanding. Pricey, optional food purchases like sweets, soda and beer are decreasing. Use of coupons is up. Store brands are replacing traditional brands and their quality is improving. We are moving toward the European model where store brands dominate many food categories. National brands are culling underachieving lines and reducing product assortments. Less is now best. Supermarkets offering the best value for our food dollars are getting the most visits. And, we are shopping less frequently and more purposefully.
In place of our previous shop-till-you-drop attitude, today Americans at all income levels are watching their pennies. Conspicuous consumption is out and thriftiness is in for the first time in decades. The longer the economy stays troubled, the longer we will practice our new cost-conscious, food buying behaviors. All behaviors that are repeated for extended periods of time become habits. The thriftiness of today may become the grocery shopping habits of tomorrow. The Nutrition Experts
© NRH Nutrition Consultants, Inc.
Jo-Ann Heslin, MA, RD, CDN is a registered dietitian and the author of the nutrition counter series for Pocket Books with 12 current titles and sales in excess of 7.5 million books. The books are widely available at your local or on-line bookseller.
Current titles include:
The Calorie Counter, 5th Ed., 2010
The Ultimate Carbohydrate Counter, 3rd Ed., 2010
The Complete Food Counter, 3rd ed., 2009
The Fat Counter, 7th ed., 2009
The Healthy Wholefoods Counter, 2008
The Cholesterol Counter, 7th Ed., 2008
The Diabetes Carbohydrate and Calorie Counter, 3rd Ed., 2007
For more information on Jo-Ann and her books, go to The Nutrition Experts
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