COVID-19 has changed nearly every aspect of daily life, and that includes the way Americans shop for groceries. For the last several weeks, the perishables industry has witnessed incredible changes in grocery shopping habits including unprecedented stock up trips that left store shelves empty, huge increases in year over year produce sales and significant shifts toward online grocery shopping. COVID-19 has taken a heavy toll on the American consumer. In addition to consumers’ concerns about their health and safety, many are also dealing with a decrease in their household income due to the closure of restaurants, services and other businesses deemed “non-essential.”
A recent study by Category Partners (CP) revealed that nearly half, 47%, of consumers have expereinced some type of economic loss due to the COVIC-19 pandemic, either job loss or a pay cut for themselves or their significant other. This change in their economic situation has spurred changes in their grocery shopping behavior, resulting in more and more consumers trying to stretch their food dollars further.
Seventy-nine percent of consumers surveyed said they are taking steps to save money on groceries, with 36% saying they are more often buying what is on sale. Nearly the same number said they are buying value packs (35%), buying more store brand items (34%), looking for coupons and other discounts (33%) and avoiding expensive items (32%). Additionally, nearly one-quarter have even switched stores, with 23% saying they are now shopping at lower cost stores.
Cara Ammon, Category Partners’ Senior Vice President, Research and Market Intel, noted, “As the lockdowns continue, and the financial stress of the pandemic worsens, we think these cost-cutting behaviors will continue and even increase. In the face of economic uncertainty, consumers will likely continue to look for ways to save money at the grocery store.”
In this study, CP polled 2,000 consumers throughout the U.S., aged 18-75+, giving it the ability to study changes in shopping behavior across region, age and household income.
The survey revealed differences among age groups. The economic impact of COVID-19 has disproportionately affected younger people. Of survey respondents under age 45, 57% said they have been impacted financially. Thirty-nine percent of that age group said they now more often buy sale items. Similarly, 37% of younger respondents said they are switching to store brands and 33% said they are avoiding expensive items.
While the financial impact has been significantly greater for younger people, the 45+ age group has also felt the financial impact, with 36% of that age group claiming negative financial impacts. Thirty-three percent of respondents over 45 years old said they are now more often buy sale items while 32% said they are opting for store brands. Nearly the same number, 31%, responded that they are avoiding expensive items.
“Interestingly, as we look at the relative size of negative financial impacts between the age groups, even though a greater proportion of younger consumers have felt the hurt, it is older consumers who are modifying their purchase behavior on a greater scale,” commented Ammon. She went on to add, “We were also able to observe some regional variation in the responses. For example, consumers in the Midwest are more likely to look for sales and consumers in the South are more likely to switch to store brands as cost cutting measures.”
Ammon added, “The data indicate that lower income consumers (under $50,000 annual household income) exhibit a willingness to shop at retailers they perceive are lower cost. As consumer income increases, consumers may remain more loyal to their retailer but are still looking for deals in the way of sales, coupons and store brand options. It goes without saying, many people are hurting. Producers and retailers can help. Understanding what and how their customers are shopping and responding can go a long way toward being good neighbors in this crazy time.”
Consumers’ health concerns, stay-at-home orders in nearly every state, the closure of many restaurants and businesses and the fact that nearly half of American households have seen a reduction in their household income have all contributed to changes in where consumers buy groceries, how much they buy and how they shop.
In the Category Partners’ study, one-third of consumers, 34%, said because of COVID-19 they are using online delivery more often for their grocery purchases, and 27% are using online grocery pick-up more often. Conversely, one-third of consumers said they are shopping at superstores less, 29% are shopping at supermarkets less, and about one-quarter of consumers are also shopping less at natural/organic stores and specialty stores.
As might be expected, younger shoppers have embraced online grocery channel moreso than older shoppers. Forty-two percent of consumers younger than age 45 report using online grocery delivery more and 33% using online grocery pick-up more now than before the pandemic. In comparison, fewer consumers age 45 and older said they have increased their use of online delivery and pickup, at 24% and 21%, respectively.
Along with changes in where consumers shop, COVID-19 continues to affect what they buy. Possibly because these items store well, about half of consumers, 51% respectively, reported they are buying more frozen foods and center store items. Consumers are also buying more dairy, fresh fruit, fresh vegetables and fresh meat. By contrast, 35% are buying less seafood than they ordinarily would. A nearly equal number of consumers have increased the amount they purchase from the deli and bakery departments as have decreased the amount they buy.
The study also revealed significant differences across age groups. Consumers under age 45 are more likely than older consumers to buy more food from each of the grocery departments. For example, 46% of younger respondents said they are now buying more fresh fruit and 45% are now buying more fresh vegetables, compared to 30% and 29%, respectively, of respondents age 45+. Likewise, 34% of those younger than 45 reported buying more dairy products, compared to only 19% of those 45+. Ammon noted, “This increase in food purchases among younger consumers makes sense. Many are now working from home, or unfortunately are at home due to furlough, and many may have children home from school. Families have gone from eating lunches and even breakfasts at work and school and eating many dinners on the run to eating all of their meals at home. That makes a huge difference in their grocery purchases.”
There are also differences by region. Consumers living in the Northeast and the South more often reported stocking up on items from every department, while somewhat fewer consumers in the Midwest and West increased their purchases from each of these departments.
In addition to where they shop and what they buy, COVID-19 has also changed how consumers shop. One of the biggest shifts is toward packaged items and away from items that may have been handled by store staff. Nearly half of consumers in the study, 46%, said they are now buying more packaged items. A significant number are also taking steps to limit the number of people handling their food, including avoiding salad bars and other self-service items (41%), using self-checkout (36%), avoiding the meat counter, deli counter and other items that require store staff to handle food (35%) and avoiding loose items (25%).
Ammon added, “Consumers have made significant changes to just about every aspect of their grocery shopping behavior. It will be interesting to see how many of these changes continue once the COVID-19 pandemic is over. Some of these shopping behaviors may be here to stay.”
The study revealed that a greater number of younger consumers making changes to the way they shop for groceries. Overall, 85% of consumers under age 45 made changes to the way they shop, while 74% of consumers age 45+ have made changes. Specifically, more than half of respondents younger than 45, 53%, said they are now buying more packaged items, compared to 40% of those older than 45.
“This will be a moving target,” concluded Ammon, “The lockdowns will end, the health crisis will abate and consumers will have in-store and restaurant options once again. The larger economic pressures will linger a bit longer. The value to retailers and suppliers in being prepared to understand and offer solutions these consumers seek and need cannot be understated.”
Source: Category Partners