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Grocery Shopper Presentation Wave Ii Q3 2009

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Results of Q3 2009 Grocery Shopper Study highlighting shopping behavior changes since the economic downturn

Results of Q3 2009 Grocery Shopper Study highlighting shopping behavior changes since the economic downturn

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  • 1. Grocery Shopper Behavior Q3 2009 - Quarterly evaluation of shopper behavior today - Changing shopper in the face of economic stress November 2009
  • 2. About Our Presenters Jane Mount is the Executive Vice President of Digital Research, Inc. (DRI), a New England based marketing research firm that focuses on new media research techniques for various Fortune 500 organizations. Prior to joining DRI in 2000, Jane held research director positions with Nabisco Brands/The LifeSavers Company, Philips Lighting Co., and Hannaford Bros. Co. Much of her work over the years has focused on category management/sales research, advertising development and new product development. Jane holds a B.S from Lehigh University and a MBA from Seton Hall University. She has been an active member of the Marketing Research Association (MRA), serving on the professional certification review committee. Jane was trained in focus group moderating at the RIVA Institute. Debra Patek is Chief Economist & Cofounder of ThinkVine Corporation, a venture backed marketing science solutions company based in Cincinnati, Ohio. Debra brings nearly 20 years of experience in the areas of pricing research, economic analysis and consumer behavior modeling. Prior to joining ThinkVine, Debra was a Director of Analytics at marchFIRST and a pricing strategist at the L.M. Berry Company, a division of BellSouth. She has an M.A. in Economics from the University of Cincinnati and taught undergraduate economics at the University of Cincinnati and Earlham College. Debra has is a faculty member of the Professional Pricing Society and a member of the National Association of Business Economists. 1
  • 3. Recession Changing How Americans Spend 2
  • 4. …And Retailers Are Reacting 3
  • 5. What is Happening to Consumers’ Relationships with Brands? 4
  • 6. What is the New Norm? 5
  • 7. Objective • The purpose of this study is continue to ascertain the current economic mood of consumers and how the economy is affecting grocery shopper behavior in the United States – What behaviors have surfaced? – What categories have been most affected? – What is anticipated for the future? – What are the expectations for holiday season? • It also continues to track our new American grocery shopper segmentation • This is our second quarterly wave 6
  • 8. METHODOLOGY 7
  • 9. Methodology • An online survey was conducted between October 20th and October 22nd, 2009 among 1,021 grocery shoppers. – Nationally representative sample drawn from EMI Surveys Panel – Questionnaire designed by Thinkvine and DRI – Survey programmed and hosted by DRI – Segmentation/advanced analytics by Thinkvine • Seventeen grocery categories analyzed – Milk, paper towels, bread, cookies, crackers, rte cereal, orange juice, salty snacks, juice beverages, pasta sauce, yogurt, laundry detergent, soft drinks, salad dressing, pet food, coffee, and OTC pharmaceuticals • Cluster analysis identified six distinct segments of shoppers based on economic impact, lifestyle changes and shopping behaviors • Quarter 3 data weighted by age, income, and region for comparability with Q2 8
  • 10. OVERALL FINDINGS 9
  • 11. The Economic Climate is Viewed as Relatively Weak, but Perceptions are Improving "Poor" 49% Q2 37% “D-” "Fair" 43% Q2 48% "Good" 6% Q2 12% Improvement driven by younger consumers % Poor Q2 Q3 "Great" 2% 18 – 34 42 23 35 – 49 50 36 50 – 64 53 47 N=1021 Q4. What is your perception of today’s economic climate? 100-pt scale 10
  • 12. ¾ of Shoppers Claim to be Negatively Impacted by Today's Economy; Hardships Remain Largely the Same as in Q2 Affects of Economy Older shoppers facing income reductions while helping out others Income reductions 36% Difficulty in paying bills 35% Age 50-64 Q2 Q3 Income Credit Card Debt 27% 31 40 reductions Job uncertainty 27% Financial support to 12 17 Job loss/unemployment 22% family Fewer experiencing Investment losses 17% investment losses now (17% vs. 23% Q2) Financial support to family or friends impacted by economy 14% Difficult access to credit 12% Serious illness 11% Home foreclosure/mtg issue 6% Difficulty selling a house 5% Other financial issues 3% None of these 27% N=1021 Q22. In the past six months, has anyone in your household been affected by any of the following? Please check all that apply. 11
  • 13. Many Shoppers View Their Current Economic Situation Negatively; Yet Are More Optimistic for the Future 5% 5% 10% 13% 26% 12% 15% 22% 34% 30% 44% 38% Great 38% Good Fair 29% 40% Poor 39% 42% 30% 15% 12% 2 Years Ago 1 Year Ago 6 Months Ago Today 6 Months From Now N=1021 Q4a. If “100” represents your economic well-being during “normal times” (i.e. average for the past few years), how would you rate your economic well-being for the following time periods? Q4b. What do you expect your well-being to be six months from now? 12
  • 14. In This Downturn 91% Have Made Changes to Stretch Their Dollars 91% 41% 35% 15% 9% Yes, I've m ade Yes, I've m ade som e Yes, I've m ade m inor No, I have not changed substantial changes changes changes m y lifestyle 50+ have adapted most (38% vs. 29% 18-34) N=1021 Q5. In recent months, have you changed your lifestyle at all to stretch your dollars more? 13
  • 15. Shoppers Are Not Just Reducing Discretionary Spending, But Also Essentials But concentrated on entertainment, clothing, and the everyday Entertainment expenditures 81% Small cutbacks to everday expenditures 81% Clothing 79% Vacations 65% Large expenditures 55% More shoppers making cuts in several traditional Holiday/Winter categories: Charitable giving 48% Q2 Q3 Clothing 71% 79%  Home maintenance 41% Vacations 60% 65%  Healthcare expenditures 36% Charitable Giving 42% 48%  Healthcare 29% 36%  N = 932 Made Changes Q6. In what areas have you made changes? 14
  • 16. A Return to Higher Levels of Spending is Not Anticipated Through Q1 2010 51% 45% 4% Y e s , I e xpe c t t o m a k e N o , I e xpe c t t o be s pe nding N o , I e xpe c t t o inc re a s e m y a ddit io na l c ut ba c k s a bo ut t he s a m e s pe nding N = 1021 15 Q7. Do you anticipate making additional cutbacks in the next six months? 15
  • 17. Maybe a Little Loosening, but Shoppers Are Not Planning to Resume Their Old Spending Habits 49% 46% 4% 1% I w ill continue to use m y I w ill spend a little m ore, I w ill return to m y Don’t know saving strategies but try to be m ore previous spending habits conservative than before Willingness to spend a little more has increased (46% vs. 41% Q2) N = 932 Made Changes Q8. Once the economy improves, do you anticipate that you will continue to use the saving strategies you are implementing to weather this tough economy or will you return to your previous spending habits? 16
  • 18. As in Q2, Shoppers Buy Needed Essentials – On Sale/With Coupons or Thru Trading Down I reduced spending on non-essential items 59% I stock up on sale items 57% I use more coupons/ promotions 52% I reduced impulse purchases 50% Make fewer trips to the grocery store 46% Trade down to store brands 44% Buying fewer convenience foods 40% Rely on weekly circulars to decide where to shop 37% Take advantage of rewards cards/programs 36% Trade down to lower priced national brands 36% More trading down to lower priced national brands now (36% vs. 30% in Q2) N = 1021 Q19. In what ways, if at all, have your grocery shopping habits changed during this economic downturn? Please check all that apply. 17
  • 19. In Q3, Fewer Warehouse Clubs or Shopping Around – More Cheap Meat Shop at Dollar Stores more often 26% Buy bulk sizes to get more value for the money 26% Use the Internet to research products, prices, and find coupons 25% Buy cheaper cuts of meat 20% Q2 24% Shopping in more stores to get the best deals 26% Q2 22% Shop at a closer store to save gas 22% Switched to a lower priced store 20% Buy less fruits/ vegetables 16% Shop at Whse clubs more 19% Q2 13% N = 1021 Q19. In what ways, if at all, have your grocery shopping habits changed during this economic downturn? Please check all that apply. 18
  • 20. Similar to Q2, Nearly Half of Shoppers Report Spending Less on Groceries This Year Focused on lower income/lower spenders Avg. spending per week $102 - a 6% decline since Q2 Same Less 42% 46% More 12% Q10. Is this about the same, more or less than you spent at this time last year? 19
  • 21. Absolute Lowest Prices Continue to be a Requirement for Today’s Shopper Importance of Absolute Lowest Prices 77% 40% 38% 20% 2% 1% 5 - Extremely 4 3 2 1 - Not at all important Important N = 1021 Q14. How important is it for you to get the absolute lowest prices when you are grocery shopping? 20
  • 22. …Coupons/Specials and Trading Down Brands (to Store and Lower Cost National) Are Key to Getting The Absolute Lowest Prices Clip coupons 16.4 Buy only sale items 12.1 Switch to store brand 11.3 Shop at a store w/better weekly specials 11.2 Switch to lower cost brand 8.1 Compare store flyers 7.5  (8.7 in Q2) Bag own groceries 6.6 In Q3, shoppers are less likely to Browse Internet coupons 6.2 compare flyers and drive to multiple Drive to multiple stores to get best deals 4.8  (6.0 in Q2) stores to get deals. In fact, they are more likely to shop at an unclean store Drive to store that is not the closest 3.3 to get the lowest prices. Choose avg quality meat/produce over highest 2.9 Shop at a crowded store 2.0 Slow checkout 2.0 Poor selection of natural/organic 1.6 General poor selection 1.4 Shop at unclean store 1.2  (0.6 in Q2) Poor customer service 1.0 Store has poor reputation 0.6 N = 988 Q15. Sometimes in order to get the lowest prices, you have to make some changes to how you shop. Please allocate 100 points across these attributes based on how likely you would be to make these changes. Note: asked among those desiring absolute lowest prices. 21
  • 23. All Categories Impacted by Changes in Purchasing Behavior with Household Staples Being Targeted Since Q2 (Milk, Bread, OJ, Laundry Detergent) Percent Who Made Changes Paper Towels 64%  12 pts OTC Pharmaceuticals* 61% Cookies 59% Salty Snacks 58%  5 pts Crackers 57% Juice Beverages 57% Salad Dressing 57% Ready to Eat Cereal 56% Laundry Detergent 56%  7 pts Yogurt 55%  9 pts Pasta Sauce 54% Orange Juice 54%  5 pts Bread 53%  10 pts Carbonated soft drinks/soda 50%  6 pts Milk 49%  12 pts Coffee 49%  6 pts Pet Products 45% * Added to the survey in Q3 2009. Q21. Now please think again about the specific categories that you purchase. In the past three months, how would you describe your purchasing of each of these categories? Response options: I have made no changes, I only buy my preferred brand with a sale or coupon, I buy a different size of my preferred brand, I buy a lower priced national brand, I buy generics or store brands, I buy my preferred brand in a lower cost store 22
  • 24. Purchasing Changes Focused on Switch to Store Brands and Purchasing Branded Items on Sale Changes Made Paper Towels 32% 15% 9% 4% 4% OTC Pharmaceuticals* 41% 8% 6% 3% 3% Cookies 21% 18% 11% 4% 5% Salty Snacks 21% 17% 10% 5% 5% Crackers 24% 16% 9% 4% 4% Juice Beverages 16% 19% 12% 5% 5% Salad Dressing 19% 20% 12% 3% 3% Ready to Eat Cereal 17% 24% 8% 3% 4% Laundry Detergent 15% 20% 13% 4% 4% Yogurt 14% 25% 10% 4% 2% Pasta Sauce 16% 17% 15% 3% 3% Orange Juice 18% 18% 10% 4% 4% Bread 29% 8% 8% 4% 4% Carbonated soft drinks/soda 13% 20% 7% 5% 5% Milk 33% 5% 6% 2% 3% Coffee 10% 21% 9% 4% 5% Pet Products 12% 12% 10% 5% 6% Switch to store brand Preferred brand with sale/coupon Lower priced national brand Different size of preferred brand Preferred brand from lower cost store * Added to the survey in Q3 2009. Q21. Now please think again about the specific categories that you purchase. In the past three months, how would you describe your purchasing of each of these categories? Response options: I have made no changes, I only buy my preferred brand with a sale or coupon, I buy a different size of my preferred brand, I buy a lower priced national brand, I buy generics or store brands, I buy my preferred brand in a lower cost store 23
  • 25. National Brand Abandonment Has Increased Significantly in Most Categories Since Q2 as a Solution to Budgetary Crunches Percent Who Purchase Generic or Store Brands OTC Pharmaceuticals* 41% Milk 33%  14 pts Paper Towels 32%  17 pts Bread 29%  15 pts Crackers 24%  12 pts Cookies 21%  7 pts Salty Snacks 21%  11 pts Salad Dressing 19%  10 pts Orange Juice 18%  7 pts Ready to Eat Cereal 17%  6 pts Juice Beverages 16%  5 pts Pasta Sauce 16%  6 pts Laundry Detergent 15%  7 pts Yogurt 14% Carbonated soft drinks/soda 13%  5 pts Pet Products 12%  5 pts Coffee 10% * Added to the survey in Q3 2009. Q21. Now please think again about the specific categories that you purchase. In the past three months, how would you describe your purchasing of each of these categories? Response options: I have made no changes, I only buy my preferred brand with a sale or coupon, I buy a different size of my preferred brand, I buy a lower priced national brand, I buy generics or store brands, I buy my preferred brand in a lower cost store 24
  • 26. In Q2, Changes Focused on Buying Preferred Brands With Promotions; In Q3, Fewer Are Holding Out for a Good Price on a Favorite Brand Percent Who Only Buy Preferred Brand with a Sale/Coupon Yogurt 25% Ready to Eat Cereal 24% Coffee 21% Carbonated soft drinks/soda 20% Laundry Detergent 20% Salad Dressing 20%  9 pts Juice Beverages 19% Cookies 18%  7 pts Orange Juice 18% Pasta Sauce 17%  7 pts Salty Snacks 17%  8 pts Crackers 16%  10 pts Paper Towels 15%  4 pts Pet Products 12%  4 pts Bread 8%  3 pts OTC Pharmaceuticals* 8% Milk 5% * Added to the survey in Q3 2009. Q21. Now please think again about the specific categories that you purchase. In the past three months, how would you describe your purchasing of each of these categories? 25
  • 27. Value, Availability and Improved Quality Driving National Brand Abandonment “I buy more store brands now than I ever did since the recession started, and I prefer them more now as they are comparable or better than the national brands...I think the quality and price are good, so I will continue to purchase store brands after the recession as well. This I won't change - my philosophy is ‘Why spend more if you don't have to?’” Comment per Waggle Market Research Online Community. Q2 respondents participated as members of the community following Q2 field. 26
  • 28. 30% Shopping Supermarkets Less; Dollar Stores and Mass Merchandisers Seeing More Activity 47% 38% 36% 33% 33% 30% 31% 29% 27% 22% 17% 17% 17% 12% 12% 11% 12% 9% 10% 7% 5% 2% 2% 1% es es es rs es s ts ts bs es rs ts re se ke ke or or ke r or le or u to o cl st ai st ar ar i st st ar st nd rs et e m rm m ug ue t ce t us a en la en R ch 's pe ea t iq Dr en l o e tm Do rtm er er in eh Fl Su u ni rm ar nl Bo m pa ar ve p O Fa s W De de n as Co le M s ca Up Shop More Shop Less N=1021 Q8a. Comparing your shopping habits to before the start of this economic downturn, would you say you are shopping more, less, or about the same at each of the following types of stores? 27
  • 29. Shoppers Relying on Cash/Debit; Utilizing Credit Less 32% 28% 27% 25% 21% 13% 13% 6% 6% 6% Cash Debit cards Credit cards Prepaid credit cards Checks More Frequently Less Frequently N=1021 Q8b. Think about the payment methods you use for your general purchases – such as cash, credit cards, or debit cards. Would you say you are using each of these methods more frequently, less frequently, or about the same as before the economic downturn? 28
  • 30. Groceries Most Often Paid for in Cash/Debit; No Change in Credit Card Use Since Last Year 67% Grocery Payment Methods in Past Year 59% 38% 19% 13% 3% Cash Debit cards Credit cards Check Food Prepaid credit stamps/WIC cards Grocery Payment Method: Change in Use 56% (Among Users of each payment method) 54% 37% 34% 29% 26% 26% 21% 19% 14% 11% 11% Cash Debit cards Credit cards Check Food stamps/WIC Prepaid credit cards* More Frequently Less Frequently * Small sample size. Interpret with caution. Q20a. What methods have you used over the past year to pay for grocery purchases? Q20b. Are you using this method more frequently, less frequently, or about the same amount as you did a year ago? 29
  • 31. For the Holiday Season, Shoppers Plan to Spend Less in All Categories, Particularly Eating out, Apparel, and Flowers/Cards Net Decline in Purchasing (% less minus % more) Eating out/dining 45% Flowers/cards 41% Apparel and accessories 40% Jewelry 39% DVDs/videos 37% Comsumer electronics 35% Computer hardware/software 34% Music 34% Event tickets 32% Sporting goods 32% Video games 31% Toys 29% Books 29% Gift cards/gift certificates 23% Groceries for holiday celebrations 16% N=1021 Q21b. Now please think about your total purchases for the upcoming holiday season, and how much you anticipate spending in each of the following categories. For each category, please indicate how much you will likely spend compared to last year’s holiday season on a scale of 1 to 5 where 1 = “Spend much less” and 5 = “Spend much more.” 30
  • 32. Shoppers This Year Plan to Either Maintain or Decrease their Online Spending 41% 39% 20% 22% 16% 13% 7% Will spend m uch Will spend a little Will spend about the Will spend a little Will spend m uch m ore online this m ore online this sam e this season less online this less online this season season season season N=1021 Q21c. Now please think specifically about your online holiday purchases. Compared with the total amount you spent online during the holiday season last year, how much do you estimate the total amount you spend this year online will change? 31
  • 33. NEW SHOPPER SEGMENTS 32
  • 34. Who is the “New Shopper?” The first wave of the Grocery Study introduced a New Shopper Segmentation, which categorized shoppers by economic impact and shopper response  Economic Impact: the economic downturn has impacted different people in different ways.  Some people are only mildly impacted  Others experience substantial hardship  Shopping Response: different shoppers have reacted in different ways to current economic conditions.  Some shoppers are more active or aggressive in the response to economic conditions  Yet, others show a more passive or restrained response 33
  • 35. Reintroducing the Six Segments Along these two dimensions, cluster analysis uncovered six key segments Segment Economic Impact Shopping Response Unfazed Mild Nonplussed Cautious Comfort * Mild Cautious Optimizer Moderate Strategic Modest Means Moderate Restrained (or Resigned) Hard Times Severe Hardship Struggling Nouveau Poor Dramatic Reversal Floundering * known as Cautious Success in wave I 34
  • 36. The % of Unfazed remains largely unchanged, with modest shifts observed in other segments Segment Composition Lifestyle Segment Memberships Response Passive Active Optimizer Cautious Modest 14.3% Distressed Comfort Means “Cautious “Optimizer” Less 23.3% 30.5% “Unfazed” Comfort” Strategically balances brand, Unfazed Hard Times Passive response to Doing well, but 8.7% convenience & NP 6.5% 16.7% economic conditions keeping an eye on quality with excessive spending affordability Intensity of Hardship Q2 Q3 “Modest Means” “Hard Times” “Nouveau” Poor Unfazed Tightening of the Struggling to make 8.3% 8.7% Lifestyle upheaval Distressed belt for an already ends meet under Cautious Comfort beleaguered dire economic after a dramatic 25.6% 23.3% More reversal of fortune Optimizer shopper conditions 12.2% 14.3% Modest Means 28.2% 30.5% Hard Times 21.1% 16.7% Nouveau Poor ** 4.6% 6.5% ** Although Nouveau Poor has a small sample size (n=67), its differences from other segments are large enough to warrant its own segment. As the current economic “shock” begins to subside, Nouveau Poor may fold back into other segments. 35
  • 37. One quarter later, the economic numbers still paint a grim picture % households Impacted Cautious Modest Hard Nouveau Unfazed Optimizer (last six months) Comfort Means Times Poor Income reduction 4.8% 24.4% 29.7% 42.7% 51.0% 61.0% Job loss / unemployment 4.2% 14.8% 19.3% 28.7% 27.5% 39.4% Job uncertainty 2.7% 21.5% 21.0% 28.3% 44.3% 39.2% Difficulty in paying bills 8.4% 15.0% 17.6% 49.1% 55.2% 69.6% Investment losses (e.g. stocks) 10.6% 15.2% 21.0% 17.9% 14.7% 31.7% Serious illness 1.9% 4.5% 10.4% 15.3% 13.4% 16.7% Credit card debt 6.9% 14.9% 14.7% 34.2% 44.6% 48.7% Access to credit 0.9% 5.7% 2.5% 16.1% 15.9% 34.4% Financial support to family or friends 3.4% 3.3% 10.3% 19.8% 17.1% 32.7% Home foreclosure/mortgage issues 0.0% 1.4% 0.0% 6.3% 0.0% 60.3% Difficulty in selling a house 1.2% 4.4% 0.0% 0.0% 0.0% 62.1% Q22. In the past six months, has anyone in your household been Green font – significant improvement in condition since Q2 affected by any of the following? Please check all that apply. Red font – significant deterioration in condition since Q2 36
  • 38. Nouveau Poor has experienced the steepest perceived drop in economic well-being…and few segments expect a full return Economic well-being rating (50 = “normal” times) 70 65 60 55 50 45 40 35 30 25 20 2 Years Ago Year Ago 6 Mos. Ago Today Six Mos from Now Unfazed Cautious Comfort Optimizer Modest Means Hard Times Nouveau Poor 37
  • 39. The Economy Prompting Degrees of Lifestyle Adjustment Across Segments. Hard Times and Nouveau Poor Report the Most Change Lifestyle Changes in Past Six Months Substantial Changes in Lifestyle Some Changes in Lifestyle Minor Changes in Lifestyle No Changes in Lifestyle 9.6% 4.5% 3.1% 20.2% 23.2% 37.0% 39.8% 47.1%  12 pt 100.0% 64.7% 48.7% 72.3% 57.1% 43.3%  10 pt  13 pt 14.3% 15.1%  9 pt Unfazed Cautious Optimizers Modest Means Hard Times Nouveau Poor Comfort Q5. In recent months, have you changed your lifestyle at all to stretch your dollars more? 38
  • 40. Healthcare and Charitable donations have taken a hit, especially among the “less impacted” segments % Reporting cutbacks in healthcare spending 59% 53% 42% 26% 17%  10 pt  12 pt  6 pt Cautious Comfort Optimizer Modest Means Hard Times Nouveau Poor % Reporting cutbacks in charitable donations 67% 59% 52% 41% 35%  7 pt  5 pt  10 pt Cautious Comfort Optimizer Modest Means Hard Times Nouveau Poor Green font – significant improvement in condition since Q2 Red font – significant deterioration in condition since Q2 39
  • 41. Absolute Lowest Prices are an Imperative for Modest Means, Hard Times and Nouveau Poor. Yet, Nouveau Poor Appears Less Resolved in Q3 Absolute Lowest Prices % Rating Extremely Important 65% 48% 49% 32% 30% 16%  20 pt Unfazed Cautious Optimizer Modest Means Hard Times Nouveau Poor Comfort Q14. How important is it for you to get the absolute lowest prices when you are grocery shopping? Green font – significant improvement in condition since Q2 Red font – significant deterioration in condition since Q2 40
  • 42. For Grocery Categories, Brand Abandonment has Accelerated Across all Segments, with Private Label Gaining Ground % of categories where “usual” brand still purchased 80% 60% 45% 36% 26% 20% Unfazed Cautious Optimizer Modest Means Hard Times Nouveau Poor Comfort % of categories where alternative brand purchased 31.9% 25.9% 26.7% 16.9% 12.3% 10.6% 13.0% 10.7% 6.6% 8.4% 8.2% 1.8% Unfazed Cautious Optimizer Modest Means Hard Times Nouveau Poor Comfort Store Brands / Generics % Categories Lesser National Brands % Categories 41
  • 43. Although Less Reliant on Promotions Than Other segments, Cautious Comfort Shows Signs of Increased Vigilance Compared to Q2 During the same time, Modest Means and Nouveau Poor have eased up 52.0% 38.0% 40.0% 38.0% 40.0% 26.0% 24.0% 23.0% 16.0% 18.0%  24 pt  6 pt  8 pt Cautious Comfort Optimizer Modest Means Hard Times Nouveau Poor Doing more research and comparison shopping Using the Internet more frequently to research products... 74.0% 72.0% 67.4% 64.0% 58.0% 51.0% 49.5% 51.4% 30.2% 23.2%  21 pt  8 pt  6 pt  21 pt Cautious Comfort Optimizer Modest Means Hard Times Nouveau Poor Rely more on weekly circulars to decide where to shop Stock up on sale items 42
  • 44. Hard Times and Nouveau Poor Show Less Resolve in Q3 to Return to Old Spending 47% 45% 46% 46% 50% 46% 54% 48% 49% 48%  9 pt  13 pt  12 pt Cautious Comfort Optimizer Modest Means Hard Times Nouveau Poor I will return to my previous spending habits I will spend a little more, but try to be more conservative than before I will continue to use my saving strategies I don't know Q8. Once the economy improves, do you anticipate that you will continue to use the saving strategies you are implementing to weather this tough economy or will you return to your previous spending habits? 43
  • 45. In Conclusion… • While news reports may have reported the end of the recession, this economic downturn is far from over in the minds and behaviors of our average American grocery shopper. – Times are still hard for the average American – And we're not out of the water - while some leveling has occurred among those most devastated by this downturn, others are newly entering this space – Current perceptions of the economic climate is weak, but most see a more optimistic future – But . . . purchase behavior is changing - Those who initially took a brand search strategy are seeking convenience by abandoning brands and shopping cheaper stores - Those new to cost cutting are adopting a brand search strategy (at least initially) – And, we don’t see an intention to go back to previous behaviors 44
  • 46. Recommendations • Intervention is required by both grocery retailers and manufacturers to reinvigorate their relationship with their customers – Relevant product/service differentials – Quality – Focus on health/environmental sustainability – Improved overall value proposition – based on good pricing 45
  • 47. Key Demographics Q3 2009 Q3 2009 (N=1,021) (N=1,021) Gender Education Male 21% High School graduate or less 23% Female 79% Some College 29% Age Associate’s Degree 12% 18 – 34 years of age 22% Bachelor’s Degree 25% 35 – 49 years of age 43% Graduate or Professional Degree 11% 50 – 64 years of age 35% Employment Status Mean 44.2 years of age Employed full time 45% Region Employed part time 14% Northeast 22% Unemployed/Looking for work 14% South 33% Unemployed by choice 17% Midwest 26% Retired 10% West 16% Annual Pre-Tax Household Income Not specified 2% Under $75,000 65% $75,000 and higher 30% Prefer not to say 5% Mean (estimated) $63,850 46
  • 48. THANK YOU Jane Mount Executive Vice President Digital Research, Inc. Media Inquiries 207-985-7660 x121 jane.mount@digitalresearch.com Jeff Mills VP Marketing & Client Engagement ThinkVine Corporation Debra Patek 513-477-1729 Office Chief Economist & Cofounder Jeff.mills@thinkvine.com ThinkVine Corporation 513-235-3823 Office debra.patek@thinkvine.com 47

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