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Consumers Build Strategies to Beat Recession

by 5m Editor
23 July 2009, at 10:24am

UK - Consumers are working out strategies to beat the recession – and pork is benefiting with consumption occasions up six per cent and retail value sales up nine per cent.

That’s one of the findings in a new report published by BPEX this week – ‘Pork and the credit crunch: How consumers are responding to the economic downturn’.

The report shows how consumers are shopping smarter as a result of the current economic downturn and credit crunch and, in effect, managing their household budgets more effectively. By switching retailers, taking advantage of certain promotions and trading down on some products, consumers are limiting their spend increases to five per cent when grocery price inflation is running at 8.7 per cent*.

While meat generally has become more expensive over the past year, demand has remained constant. Consumers have, though, been changing their repertoire of meats with the result that pork has benefited: fresh pork consumption grew by six per cent last year (in terms of meal occasions)** and retail value sales are up by nine per cent in the 12 months to March 2009***. In addition, research shows that the recession appears to have enhanced the image of pork.

"I am heartened that there are such encouraging signs for the pork sector," said BPEX chairman Stewart Houston. "Not only are pork and pork products meeting consumer needs during the recession, there are signs we can change their perceptions of pork and eating habits in the longer term.

"For example, where pork may have been regarded in the past as ‘the cheap alternative’, it is increasingly being regarded as the value for money meat of choice," Mr Houston said.

He added that more consumers are finding positive reasons to choose pork as a preference rather than an alternative, saying: "The opportunity, therefore, is to continue to work to reduce pork’s reliance on price promotions by reinforcing its versatility, quality, taste and health credentials."

Consumers reacting in different ways

Households with children, those in lower social grades and, obviously, those hit by redundancy, have been most affected by the recession. Single households and empty nesters, on the other hand, have had to make little change to their shopping habits.

Many consumers attribute the higher cost of their shopping baskets to retailer profiteering: they resent the fact that while many other sectors have been lowering their prices, food retailers have been increasing theirs.

Health has become less of a motivator of choice for meals for many households – there is a greater need for meals to be filling. And among households with children, home-made food occasions have increased considerably.

Middle class households have taken the downturn as a wake-up call and are cutting down on unnecessary spending. Recognising that pre-recession things had got out of hand, they are now careful not to buy too much and end up throwing some away as waste and are taking a longer term view of their shopping habits.

The typical working class reaction on the other hand is to find a short term solution. They will work round the problem, for example by finding lower-price alternatives, taking advantage of promotions and using discount coupons.

Positive purchase trends in pork

Few consumers have noticed significant price inflation on pork and pork products – other than on bacon. Fresh pork consumption is up 6 per centyear-on-year – with growth driven by almost all consumer groups but especially the 0ver-45s.

Sausages have seen both strong value growth as well as volume growth.

In addition to retaining its strong traditional values of a great roast for the whole family, pork is increasingly recognised for being healthy, convenient and economical.

The recession in numbers

What people are saying/doing about the recession:

  • 75 per cent - are doing nothing
  • 50 per cent - will not be able to save
  • 41 per cent - are finding it difficult to get a loan or other credit
  • 16 per cent - are having to postpone retirement
  • 12 per cent - are spreading their savings among several banks
  • 7 per cent - are changing their bank account
  • 24 million - more home-made stews and casseroles were prepared in the nine months to November 2008 than in the same period of 2007.
  • 6 million - more home-made sausage dishes were prepared in that same period
  • 29 per cent - the increase in the number of households with children choosing food on the basis that they were filling
  • 6.3 per cent - of meal occasions in households with children involve home-made meals – a significant increase on recent years

Data sources

* TNS Worldpanel: 12 weeks to 22 February 2009 versus same period the previous year
** TNS Worldpanel Usage: Total in-home consumption (meal occasions) for the year to November 2008
*** TNS Worldpanel: Retail sales for 52 weeks to 22 March 2009 versus a year ago