Viewpoints

Four Big Clues to Consumer Spending This Holiday

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This isn't an attempt to predict holiday 2011 sales within a tenth of a percentage point. There are plenty of those forecasts.

Instead, it's a quick look at some consumer behaviors that will drive the holiday food sales outcome at a time of higher food and fuel prices. And it's not the same story as a year ago.

Here are four things to watch:

1. Impulse Avoidance: Consumers will make lists and stick to them. So you think you've heard that before? Well, let's just say this time around such consumer behavior will be on steroids. Even after so many shoppers have resorted to lists in recent years, some 32% of consumers will rely even more heavily on them in planning holiday meals and celebrations, and they plan to stick to them, according to responses to Symphony IRI Group's annual Holiday Shopping Survey of consumers. Other tactics some consumers are planning: buying more in bulk, redeeming more reward points, and embracing more private label.

2. New Digital Leap: Consumers are used to searching the Internet for deals on electronics and general merchandise, but now food products are joining that list, said Susan Viamari, editor, SymphonyIRI's Times & Trends, in an interview. Some 67% of consumers are actively going to sites like Groupon more heavily for food shopping, and 45% are getting more food coupons from social networking sites, according to the survey. “That surprised me, Viamari said. “It underscores how focused they are on saving money.”

3. Zero Sum Game: Consumers, now with more restricted budgets, will have to make tougher decisions on how to allocate their spending across all retail channels. “We're now competing with all kinds of businesses, including appliance stores that sell products we don't sell,” Robert Ortiz, vice president of marketing and merchandising for Bashas, said in a recent SN article.

4. Favoring Supermarkets: There's good news for supermarkets as holiday shopping gets underway. Supermarkets are far and away the channel that consumers will most frequent for food and beverages this season, even more than last year, according to SymphonyIRI.

Supermarkets start with a big advantage over competitors, so the season is theirs to lose. Will they strike the right balance between price and innovation? Will they take advantage of traffic in ways that build loyalty into next year? The answers to those questions, and a few others, will determine the impact of this season.

Contributors

David Orgel

David Orgel is executive director, content & user engagement, of Supermarket News (SN) and its website, SupermarketNews.com. Orgel delivers his opinions on industry trends through a bi-weekly...

Carol Angrisani

Carol Angrisani is an associate editor at Supermarket News. Along with covering the packaged goods beat, she also manages SN’s annual private-label and ethnic marketing supplements. Carol...
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