The giant base of aging baby boomers is turning older Americans into a powerful purchasing force.
With more than 78 million members, baby boomersâ€”the generation born between 1946 and 1964â€”account for approximately one-quarter of the U.S. population.
Datamonitor LLC, a London-based research firm, meanwhile, projects there will be 103.3 million persons aged 50 and over in 2012, up 2.4 percent from 2007.
Persons 55 and olderâ€”a segment larger than the Hispanic and African-American sectors combinedâ€”hold more than 75 percent of the nation’s wealth; have $2 trillion in disposable income; and control 70 percent of the nation’s disposable income, according to Harrisburg, Pa.-based Varsity, a 55-plus brand marketing consultancy.
Yet, while these older shoppers are a potent source of potential revenue for meat and deli retailers, many operators are not paying adequate attention to the sectorâ€”and are missing large income opportunities, analysts say.
“Older people have money,” notes management expert and best-selling author Tom Peters. “It’s stupid for merchandisers to focus on the eighteen to forty-four year olds. They have no money. People turning fifty today have more than half of their adult life ahead of them.”
Al Kober, director of retail for Wooster, Ohio-based Certified Angus Beef LLC, adds that retailers often generate greater profits from older customers because many of those shoppers are willing to pay a higher unit price for proteins.
Indeed, because baby boomers are frequently part of one- and two-person households, many prefer smaller packagesâ€”which typically are more expensiveâ€”instead of the larger bargain trays, he states.
“Operators don’t make as much money from the family packs of meat,” Kober says. “Many older couples are not concerned with price and often will shop at only one supermarket instead of studying advertising circulars and visiting several stores to get the best deals.”
A 2008 study by Kansas State University also found that older customers typically would not purchase any meat if the store did not offer their preferred package size.
Such shoppers often have difficulty handling heavy packages and/or lack the storage space to freeze excess meat.
“They frequently want to eat the item quickly and not deal with cutting, wrapping and storing the products,” says Mary Meek Higgins, Kansas State associate professor of human nutrition.
Perhaps the most significant merchandising obstacles, however, are shelves and signage in meat and deli departments that make it difficult for older customers to reach or view items, she notes.
“The height and depth of the case makes it hard for shorter shoppers to see the back of the shelves,” Higgins states, adding that some consumers assume products are out of stock if not visible.
The Kansas State study, which analyzed the shopping patterns of 13 consumers between the ages of 54 and 87, also revealed that many of the individuals make purchasing decisions based on the total cost of the package rather than the product’s unit price.
Because the shoppers also often focus on a protein’s nutritional content, it is important that product data, including the expiration date and ingredients, are listed in easy-to-read print for the visually challenged, Higgins says.
In addition, it is vital that operators train meat and deli associates to be patient when serving older shoppers who may have vision and/or hearing problems, says Tim Henderson, senior director and consumer strategist, retail and matures markets, with Iconoculture Inc., a Minneapolis-based research and advisory firm.
Such employees also should be able to answer questions about allergens and other food elements.
“That can make or break a shopping excursion,” Henderson says.
Stores that offer dining areas also are more attractive to older consumers, analysts note.
“It is important to have a seating section where seniors can rest,” states Joe Hynes, an Atlanta-based food industry consultant. “Offering a space where they can visit and eat creates a sense of community.”
Indeed, a 2008 study of 800 consumers age 65 and older by the University of Ulster in Northern Ireland found that many view shopping as a chance for social interaction rather than a chore.
Because older shoppers also value personal service, the Ulster researchers recommend that retailers have better trained and additional staff; friendlier packaging; more single portion packs; and product promotions that do not discriminate against single or smaller households.
Henderson adds that while many retailers “tend to believe that age forty is when the consumer stops buying,” older consumers frequently spend more on proteins than other shopper segments and often will switch brands
“Operators need to find ways to reach out to this growing demographic group and create a point of differentiation,” he states. “Many retailers and manufacturers are falling down by not recognizing the senior consumer.”
Paul Murray, Varsity touchpoints director, agrees.
“The more we can make the shopping experience for older consumers seamless, the more sales will be generated,” he states.