Consider this television reality plot: Gen X and Yers must source food by navigating an economic minefield. Inflation soars. Gas hits $4 a gallon. Jobless rates double. Credit dries up. Debt skyrockets. Food prices reach an all-time high. It is no longer a question of recession. The dreaded D word is now being whispered. Given the above bad-to-worse scenario, which no one is predicting, how will food shoppers under 40, who aren't the most loyal patrons of traditional supermarkets, change their purchasing habits? Here lies an opportunity.
The Xers, generally 28 to 40 years old, are now faced with rising debt, devalued homes and a shrinking job market — and may feel for the first time in their “I want it now” lives a squeeze on their discretionary income. The “aspirational” thing, which has come to define this generation, suddenly becomes out of reach. Forget Starbucks' new $2.50 premium brew. They'll now opt for the $1 cup with three refills. Nix the Châteauneuf du Pape and pass the Two Buck Chuck. No more family dining out at Applebee's. Eating at home is de rigueur.
The Yers, those under 28, are a slightly different breed from the independent Xers, known for their love of shopping. At 70 million strong, this generation represents an important sector of future food consumers. This group has been pampered by overindulgent parents, and as a result they have a sense of entitlement. Ethnically diverse, they crave different foods, flavors and tastes. They want it quick — immediate gratification — yet they want it to be delicious. Spending devalued dollars, they question now if they can afford the Chipotle Mexican Grill or the more expensive imported sauces.
This is the generation that grew up on the Net and are plugged in 24/7. Online shopping is in vogue with this group, as are YouTube and Facebook. In terms of food sourcing, high gas costs could curtail online food delivery services, causing this generation to seek other alternatives.
The biggest concerns among Gen Y professionals are salary coupled with health care/retirement benefits and job stability, according to a recent financial security survey conducted by Robert Half International. One respondent's concern was “that I won't make enough money to provide a good life for my family with rising costs of everything from fuel to home and food.”
“[Those under 40] feel entitled to a whole range of flavors and good food. They have expectations of what good food is all about. Are they going to cut back on organic or stop buying sauces?” asks Mona Doyle, who heads The Consumer Network, a consumer research firm, in this week's SN retail survey cover story.
While the pain of the economy has yet to be felt to the degree outlined above, supermarkets appear well insulated from the downturn, as noted in SN's survey. Supermarket operators have a chance to win over Millennials pressured by a dismal economic outlook by offering healthy, affordable and easy meals to go, affordable premium private label, targeted promotions on popular brands, and online cooking information and instruction.
If the economy exerts enough pressure, Millennials may change their perception of food as a convenience to food as a necessity, opening the door to cook from scratch.