Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- The bottom line: Budget shopping applies to all consumers
- Retailers must recognize and embrace consumer budgeting necessity
- Younger shoppers gravitate to different retailers, with different rationales
- Foodservice loss is grocery store gain, tempered by discounter pressure
- Wal-Mart the ultimate discounter
- Mass merchandisers need to find a niche
- Drug stores feel the impact of competitive prescription programs
- Club stores enjoy healthy growth, benefit from affluent customer base
- Department store sales falter
- Electronics stores float on sales of consumer “necessities”
- Internet stores a bright light
- Clothing sales shift to discounters and thrift stores
- Price sensitivity is more evident for food than for hygiene/personal care
Insights and Opportunities
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- Key points
- Private label can beat out brand names – across all categories
- Is smaller better?
- Use the internet as much as possible
- e-coupons
Fast Forward Trends
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- Trend 1: Rebuilding Trust
- What’s it about?
- What we’ve seen
- How to apply it
- Trend 2: Over-Optioned Consumers
- What’s it about?
- What we’ve seen
- How to apply it
Market Drivers
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- The bottom line
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- Figure 1: Year-over-year budgeting trends, July 2008
- The culprits
- Rising energy and food costs
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- Figure 2: Consumer Price Index, key consumer items, January 2006-August 2008*
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- Figure 3: Average gas price, First week of October, 2004-08
- A nation deep in debt
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- Figure 4: Consumer credit outstanding, dollar change, 2007-08
- Figure 5: Consumer credit outstanding, percentage change, 2007-08
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- Figure 6: Debt service ratio and financial obligations ratio, 2004-08
- Discounters hold the trump card
- Back to school an early indicator of holiday shopping patterns
Year-Over-Year Budgeting Trends
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- Key points
- Budgeting becoming more of a necessity for most
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- Figure 7: Year-over-year budgeting trends, by gender, July 2008
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- Figure 8: Year-over-year budgeting trends, by age, July 2008
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- Figure 9: Year-over-year budgeting trends, by HH income, July 2008
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- Figure 10: Year-over-year budgeting trends, by presence of children, July 2008
- Gas, food and utility bills driving need for budgeting
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- Figure 11: Reasons for budgeting more money, by gender, July 2008
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- Figure 12: Reasons for budgeting more money, by age, July 2008
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- Figure 13: Reasons for budgeting more money, by HH income, July 2008
Creating the Budget and Assessing Sales
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- Key points
- Coupon use is on the rebound
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- Figure 14: Budget creation and sales assessment factors, by gender, July 2008
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- Figure 15: Budget creation and sales assessment factors, by age, July 2008
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- Figure 16: Budget creation and sales assessment factors, by HH income, July 2008
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- Figure 17: Budget creation and sales assessment factors, by presence of children, July 2008
Where Consumers Shop
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- Key points
- Grocery stores lead, but consumers seek out competitive pricing
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- Figure 18: Where consumers shop, by age, July 2008
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- Figure 19: Where consumers shop, by HH income, July 2008
Grocery Store Budgeting Behaviors
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- Key points
- Kroger: The largest grocer grows sales, woos the budget shopper
- Whole Foods fights its “whole paycheck” image
- Trader Joe’s—“Your neighborhood grocery store”
- Meijer’s—more than just a grocery store
- Grocery threatened by discounters but gains the restaurant crowd
- Grocery store budgeting habits toe the mainstream line
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- Figure 20: Grocery shopping budgeting behaviors, by gender, July 2008
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- Figure 21: Grocery shopping budgeting behaviors, by age, July 2008
Wal-Mart Budgeting Behaviors
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- Key points
- Deep discounts and cross-merchandising drive success for Wal-Mart
- The distinct Wal-Mart demographic profile
- Ongoing efforts to be budget-friendly
- Sale items and cheap products trump coupon use at Wal-Mart
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- Figure 22: Wal-Mart budgeting behaviors, by gender, July 2008
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- Figure 23: Wal-Mart budgeting behaviors, by age, July 2008
Mass Merchandiser Budgeting Behaviors
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- Key points
- Target appeals to more affluent consumers
- Big Lots—not the typical Mass Merchandiser
- Most Mass shoppers are drawn to sales
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- Figure 24: Mass merchandisers budgeting behaviors, by gender, July 2008
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- Figure 25: Mass merchandisers budgeting behaviors, by age, July 2008
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- Figure 26: Mass merchandisers budgeting behaviors, by HH income, July 2008
Dollar Store Budgeting Behaviors
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- Key points
- Dollar General benefits from increased traffic
- Dollar Tree courting the budget shopper
- Dollar store shoppers expect to find good deals
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- Figure 27: Dollar store budgeting behaviors, by HH income, July 2008
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- Figure 28: Dollar store budgeting behaviors, by HH income, July 2008
Drug Store Budgeting Behaviors
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- Key points
- Walgreens continues to grow its presence
- Rite Aid facing post-Eckerd acquisition struggles
- Promoting sales can prevent attrition to one-stop shopping alternatives
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- Figure 29: Drug store budgeting behaviors, by gender, July 2008
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- Figure 30: Drug store budgeting behaviors, by age, July 2008
Club Store Budgeting Behaviors
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- Key points
- Costco’s “Lucky Twelve” rides on affluent consumers
- Sam’s Club has more diverse appeal
- Club stores win with bulk and affluent consumers
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- Figure 31: Club stores budgeting behaviors, by gender, July 2008
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- Figure 32: Club stores budgeting behaviors, by household income, July 2008
Department Store Budgeting Behaviors
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- Key points
- JCPenney—not giving up without a fight
- Nordstrom’s luxury not enough
- Sales are necessary to lure customers to department stores
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- Figure 33: Factors affecting spending behavior, August 2008
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- Figure 34: Department store budgeting behaviors, by gender, July 2008
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- Figure 35: Department store budgeting behaviors, by age, July 2008
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- Figure 36: Department store budgeting behaviors, by HH income, July 2008
Electronics Store Budgeting Behaviors
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- Key points
- Best Buy banks on mobile phones and no-interest lures
- RadioShack sales swing up
- Coupons and sale items can encourage traffic at electronics stores
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- Figure 37: Electronics store budgeting behaviors, by age, July 2008
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- Figure 38: Electronics store budgeting behaviors, by HH income, July 2008
Internet Store Budgeting Behaviors
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- Key points
- Amazon appeals with diverse products supported by customer reviews
- Overstock.com the one-stop shop for budget finds
- Advantages abound for budget shoppers on the internet
- Bring the deals up front and center
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- Figure 39: Internet store budgeting behaviors, by age, July 2008
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- Figure 40: Internet store budgeting behaviors, by HH income, July 2008
Budget Shopping for Clothing
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- Key points
- Clothing shoppers are trading-down to deep discounters and thrift stores
- Clothing shoppers willing to spend time to find bargains
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- Figure 41: Budget shopping for clothing, by gender, July 2008
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- Figure 42: Budget shopping for clothing, by age, July 2008
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- Figure 43: Budget shopping for clothing, by presence of children, July 2008
Budget Shopping for Food at Home
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- Key points
- Rising food prices drive consumers to seek out less costly options
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- Figure 44: Budget shopping for food at home, by age, July 2008
- Store brand usage
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- Figure 45: food at home: store brand usage, by age, July 2008
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- Figure 46: Food at home: store brand usage, by presence of children, July 2008
Budget Shopping for Hygiene/Personal Care
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- Key points
- Shoppers less likely to seek out deals on hygiene/personal care
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- Figure 47: Budget shopping for hygiene/personal care items, by gender, July 2008
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- Figure 48: Budget shopping for hygiene/personal care items, by presence of children, July 2008
- Store brand usage
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- Figure 49: hygiene/personal care items: store brand usage, by age, July 2008
Spending Extra Money
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- Key points
- Debt a rising concern
- Potential for restaurants and the holiday season
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- Figure 50: Where consumers spend their “extra” money, July 2008
Advertising
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- Helping “staycationers” make the most of summer
- Drawing budget shoppers away from the competition
- Restaurants roll out LTOs
- Applebee’s
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- Figure 51: Applebee’s three-course classics, 2007
- Chili’s
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- Figure 52: Chili’s: spice up your weekend, 2007
- Olive Garden
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- Figure 53: Olive Garden sauce and pasta combos, 2007
- Wendy’s
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- Figure 54: Wendy’s stack attack, 2007
- Automobiles push mileage advantages and low financing
- BMW
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- Figure 55: BMW deals, 2007
- Chevrolet
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- Figure 56: Chevy Tahoe and gasoline, 2007
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- Figure 57: Chevrolet Red Tag Event, 2007
- Ford
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- Figure 58: Ford quality and gas mileage, 2007
- Retail outlets tout savings, savings, savings
- Macy’s
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- Figure 59: Macy’s Easter sale, 2007
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- Figure 60: Macy’s Fourth of July sale, 2007
- Figure 61: Macy’s one day sale, 2007
- Wal-Mart
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- Figure 62: Wal-Mart targets female shopper, 2007
- Electronics
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- Figure 63: Dell Vostro, 2007
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- Figure 64: Dell Vostro II, 2007
Custom Consumer Groups: How Kids Come into Play
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- Figure 65: Year-over-year budgeting trends, by presence of children, July 2008
- Moms are most likely to use coupons
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- Figure 66: Budget creation and sales assessment factors, by presence of children, July 2008
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- Figure 67: Where consumers shop, by age, July 2008
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- Figure 68: Wal-Mart budgeting behaviors, by age, July 2008
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- Figure 69: Internet store budgeting behaviors, by HH income, July 2008
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- Figure 70: Where consumers spend their “extra” money, July 2008
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Appendix: Other Useful Consumer Tables
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- Figure 71: Shopping habits, February 2007-March 2008
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Appendix: Trade Associations
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