Australian consumers altering their food shopping habits

Posted by Daniel Palmer on 27th October 2008

Australian shoppers are re-evaluating their shopping habits in the face of rising household costs, according to a recent study undertaken by The Nielsen Company. This has seen two out of every three Australians (66%) reduce, or plan to cutback on, purchases of non-essential grocery items, 41 per cent avoiding the purchase of certain items altogether, and more than one-third (38%) buying fewer items.

The Nielsen study, which surveyed 1,500 Australian consumers, found that fuel, home loans, groceries, utilities and dining out were the top five services/products to have had a significant recent price change, ahead of other household expenses such as rent or entertainment.

“We are at an inflexion point in consumer spending – a time when new habits are being created in the face of the increasing cost of living,” Gillian O’Sullivan, Executive Director, Customised, The Nielsen Company, advised. “And while this is leading to more dollars being channelled into supermarkets and grocery stores as shoppers eat out of home less, not all supermarket categories are seeing increasing volumes as shoppers cut back on their supermarket impulse purchases, opt for cheaper housebrand/generic products and start looking for smarter ways to shop.”

Asked to indicate which changes they had made or intended to make to the way they buy certain supermarket items, more than half (56%) were checking shelf prices more carefully, 46 per cent indicated they were waiting for specials before making their purchases and over two-fifths (44%) were reading supermarket catalogues to decide where to shop. A further 30 per cent of Australian shoppers said they had changed where they shop in an attempt to reduce their household grocery bill and more than one quarter (26%) had switched (or planned to switch) to retailers’ own brands – private label. Only six per cent of Australians surveyed said they had not made any changes to their shopping behaviour.

The impulse sector appears to have been the hardest hit by the current economic climate, according to the Nielsen study. Nearly three-quarters of shoppers (73%) claimed they were cutting back on confectionery purchases, 67 per cent indicated they were buying less biscuits and potato chips, and almost two-thirds (62%) had cut back on their soft drink purchases.

With the ABS reporting a shift in food expenditure away from cafes, restaurants and take-away back to supermarkets in the past six months, Nielsen’s data indicates this shift has seen growth in sales of ‘back to scratch’ cooking items such as dry pasta (up 5%), pasta sauces (up 4%), canned tomatoes (up 6%), packet sauces and gravies (up 5%), stock (up 6%) and rice (up 6%).

“Although we’ve had a couple of rate cuts by the RBA now, consumers are still having trouble making ends meet, and for the grocery sector, this means we could be seeing reduced sales across a number of categories which consumers view as being ‘non-essential items’,” Ms O’Sullivan observed. “On the flip side, however, DIY cooking products are enjoying a resurgence in popularity as families opt to eat in.”

Other notable changes that consumers had made, or intended to make, included:

  • Over half (53%) of those surveyed indicating they would shop around to get the best price for most items
  • Writing a shopping list is becoming more common amongst consumers (47%), as they endeavour to reduce purchases of ‘non-essentials’
  • More than a quarter (26%) suggested they were stocking up when on special and 21% had, or planned to, shift to a cheaper ‘branded’ product
  • Australians were found to be most likely to change the place they usually shop for fruit and vegetables (41%) than for meat/fish/poultry/deli (32%) or their main shop (21%).