Rising Prices Cause 42% of Consumers to Give up Favorite Food Brands

June 19, 2008

This article is included in these additional categories:

CPG & FMCG | Retail & E-Commerce

A sizeable 42% of consumers say they have given up favorite food brands because of rising prices and economic concerns, according to a study from Information Resources, Inc. that shows the lagging economy is driving a dramatic move back to basics and a reversal of decades-long trends for convenient and healthier foods.

The “IRI Times & Trends Special Report: Competing in a Transforming Economy” report?finds that CPG prices are up 6.6% vs. 2006, with significant price increases in eggs, pasta, baby formula and milk:

iri-food-category-price-index.jpg

Escalating prices have bred high price sensitivity, driving declining demand across multiple categories, growth in private label, trial of lower-priced brands and accelerated channel migration, IRI said.

Though changes in shopping and purchase behavior vary based on life stage and presence of children, those with lower-incomes report being the hardest hit:

iri-food-trouble-buying-groceries-by-income-segment.jpg

  • Roughly half of all consumers with incomes less than $55,000 per year say they have trouble affording the groceries they need.
  • Nearly a quarter of those earning between $55,000 and $99,000 also say so.
  • Among those with incomes over $100,000, 16% report having trouble.

As a result, consumers are increasing purchases of basic ingredients and meal components, reducing restaurant spending and decreasing purchases of “non-essentials”:

iri-food-consumer-tradeoffs-driven-by-economy.jpg

  • 53% of consumers report that they are cooking from scratch more now than they were six months ago.
  • About 59% say they are buying fewer single-serving products.
  • 55% say they are buying fewer prepared meals.
  • 52% say they are buying fewer organic products.
  • Stores are seeing a resurgence in sales of frozen foods, perishables, and “center-store” items.
  • Private-label products show strong gains, with 50% of consumers saying they have stepped up their spending on such products in the last six months.
Chart-Library-Ad-1

Explore More Articles.

Which Skills Are Important in RevOps?

Which Skills Are Important in RevOps?

9 in 10 RevOps professionals view data analysis skills as being important, a high percentage also don’t believe they need this skill for their job.

Marketing Charts Logo

Stay on the cutting edge of marketing.

Sign up for our free newsletter.

You have Successfully Subscribed!

Pin It on Pinterest

Share This