Shoppers already act like it’s a recession: Report

Many grocery shoppers are already behaving as if the U.S. is in a recession, according to a report from Jacksonville, Fla.-based sales and marketing firm Acosta.

The report identifies six overarching trends for the grocery and CPG industries in 2023, including increasing frugality among shoppers.

“When shoppers believe we are in a recession, they will behave as though we’re in a recession,” said Kathy Risch, senior VP, consumer insights and trends at Acosta. “They are doing less, trading down, practicing smart, conservative and creative behaviors that are likely to last.”

Among such consumer behaviors identified by Acosta’s research:

• 67% are spending less on discretionary items like clothing

• 63% are eating up as much food as they have on hand before buying more

• 61% are eating out less

• 52% are spending less on entertainment

• 46% are saving less

Consumers are still seeking affordable indulgences, however, including snacks and beauty care items. The report found that 25% of shoppers said they are snacking more than usual, often seeking comfort foods.

The other five predictions identified by Acosta included a focus on retail experiences, the evolution of personalization, a commitment to collective wellness, the transformation into a hybrid shopping world, and complicated dynamics around dining out.

Here’s a closer look at each:

Retail experiences: Shoppers have three key expectations in 2023 for their in-store shopping experiences: enjoyment, convenience and value, Acosta said.

“Seamless omnichannel shopper experiences are table stakes, and retailers will want to bring in-store experiences online and digital experiences into the store,” Acosta said in the report.

Acosta cited retailers such as Walmart’s increasingly looking to enhance the in-store shopping experience with technology such as QR codes and smart screens. 

With 5G adoption in retail stores set to triple by 2024, according to a report from Incisiv cited by Acosta, “shopping will become more connected, engaging and fun for consumers,” Acosta concluded.

Personalization: The rapid growth of retail media networks, such as those offered by Amazon, Instacart, Walmart, Kroger, Albertsons, and 7-Eleven, are facilitating more personalized connections between CPG companies and shoppers. These include “in-the-moment deals” offered in stores and electronic shelf labels that leverage artificial intelligence and app connectivity.

“To capitalize on this trend, brands should rethink promotion playbooks focusing on ways to reallocate spending to create more personalized experiences for shoppers,” Acosta concluded.

Collective wellness: This holistic idea of wellness encompasses not only personal well-being but also that of family and the planet, as consumers increasingly seek more economic, environmental, and social justice as part of a global “value reset.”

These trends will manifest at retail in the form of more in-store clinics and other health services, as well more transparency around sustainable initiatives by CPG companies and the ongoing growth of plant-based product alternatives.

Hybrid shopping: Nearly half of all shoppers buy many types of products both in-store and online, according to Acosta, including:

• Apparel – 57%

• Beauty care – 48%

• Electronics – 44%

• Home and kitchen – 50%

Hybrid medicine is also growing as a form primary care, according to Acosta, which cited Amazon Clinic as an example.

Dining out: Consumers are torn between the pressures of inflation and pent-up demand for the experience of dining in restaurants, according to Acosta.

While restaurants face ongoing pressures to recruit and retain employees, as well as supply chain shortfalls, retailers have opportunities to meet demand for prepared foods with their own offerings to help consumers enjoy restaurant-style foods at home, Acosta said.