Jun 23

Written by: IRI Blog
6/23/2009 1:43 PM

We promised last week to reveal the results of our Summer Rituals survey that asked 1,000 U.S. consumers to share their summer spending plans in light of the shaky economy.

Overall, consumers across all income levels are planning to spend less this summer, yet they’re not planning to hold back on life’s pleasures as severely as we saw during the last half of 2008. Savvy Americans have developed and tested new strategies for saving money and are continuing to implement the strategies that have been working best for them in the past 12 months.  

Consumers are still paying close attention to their leisure budgets, yet they seem to be opening their wallets, just a little. In spring through winter of 2008, 67 percent of consumers earning $35,000 or less had to purposefully reduce spending or not spend at all on their favorite activities.  These percentages were also significant amongst higher income makers. Sixty-two percent of those earning $35,000 - $54,999 and 53 percent of those earning $55,000 - $99,999 reported they also had to cut back or eliminate spending on favorite activities during the last nine months of 2008.  At the highest end of our scale, 43 percent of those bringing home more than $100,000 also cut out their preferred activities as a means to conserve funds.

In comparison, in summer 2009, U.S. consumers say they are planning to spend less on vacations or will not spend at all, yet the cutbacks are not as alarming as previously reported for 2008. Forty-two percent of those earning $35,000 or less and 39 percent of those earning $35,000 - $54,999 plan to be more frugal this summer than last.

Of those making $55,000 - $99,999, 35 percent are planning to reduce or eliminate summer vacation spending and just 28 percent of those earning $100,000 or more will cut down, while no one in this bracket anticipates spending nothing at all on vacation.

A common cost-cutting strategy seen across the U.S. is to cook meals at home, foregoing dinners out. At year end 2008, we reported that during Q2, Q3 and Q4 more than 50 percent of consumers in every income level ate out less often to help minimize spending.

This summer, the stay-at-home trend will continue; however, the blow is not as hard hitting with fewer consumers reporting plans to cut out their nights on the town. Across the board, 58 percent of all consumers surveyed say they plan to eat out this summer during excursions, while 41 percent are planning to pack self-made meals rather than purchasing meals while out and about.

In the $35,000 and under income bracket, 52 percent plan to dine out less this summer, compared to a whopping 72 percent, who said they ate out less in 2008.  Down 10 percent from reported behaviors in Q2 through Q4 of last year, 53 percent of individuals making $35,000 - $54,999 and 45 percent of those making $55,000 – $99,999 intend to cut out nights on the town. Those making more than $100,000, 41 percent say they will eat out less this summer compared to 60 percent last year.

To offset dining out less, there has been a significant rise in the amount of meals cooked at home.  Based on what consumers reported doing last year compared to their plans for summer 2009, this trend is continuing to rise.  Consumers are implementing this money-saving strategy as an ongoing habit, presenting numerous opportunities for CPG retailers and manufacturers.

Across every income bracket, there is an 18-28 percent increase in individuals planning to alter their cooking habits at home in hopes of squeezing out a few extra bucks.  Sixty-two percent of those making $35,000 or less were cooking from scratch more often in 2008, while now 80 percent of consumers in this bracket say they intend to change their cooking habits at home this summer.

Similarly, 53 percent of individuals in the $35,000 - $54,999 and $55,000 - $99,999 ranges were cooking from home during the last nine months of 2008. Now, 78percent and 75 percent of these individuals are planning to do so in the summer season, respectively.  Most surprising of all, with a 28 percent increase, 66 percent of those earning more than $100,000 plan on changing their cooking habits at home for the summer, when only 38 percent of this group were doing so in 2008.

What’s This Mean for CPG?

IRI’s Summer Rituals study provides an excellent example of “when one door shuts, another one opens.”

CPG manufacturers should think about expanding promotional strategies in the home, where shoppers will spend more time this summer, with less emphasis on in-store promotions.

Retailers might think about catering to the stay-at-home shopper with specials, such as “creating the perfect family barbeque,” section devoted to the complete needs of the shopper putting together a meal cooked outdoors – hot dogs, hamburgers, ribs, and drinks, as well as charcoal, fluid, hot mitts, and bug-repellent torches.

While shoppers in general are changing their summer rituals, there is no “one size fits all” solution.  Shoppers in different geographies, income levels and different ethnic backgrounds are adjusting their behaviors differently.

We plan to continue tracking consumer spending habits in response to the economy, as well as seasonal traditions and holidays.  We feel that the transforming economy presents an unprecedented amount of opportunity for retailers and manufacturers to tailor strategies to consumer needs and provide what they want most.  We will certainly report back with our findings on an ongoing basis and hope you find value in what we have to offer.  We are certain there will be numerous success stories from the CPG world throughout 2012, as we assist companies in utilizing shopper trend data to meet their customers eye-to-eye.

Please feel free to comment below if you have any thoughts on these results or if you have any questions you’d like to see answered regarding consumer and shopper behavior trends.

Have a wonderful summer and keep spending wisely!

Best,
Thom Blischok

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