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An uncertain economy
FDIN Seminar June 2008
Qualitative insights
1
Lesley Thompson: background
Founded ‘Changes’ in 1997Qualitative research-based consultancy
Particular interests in food, retail, health and wellbeing in context of cultural trends
Broad previous experienceHead of qualitative unit at The Research Business
Advertising agencies and client company marketing, as well as qual and quant research agency experience
Wide range of food, drink and retail clients over time
FDIN Seminar June 2008 2
Scope of this presentation
Range of relevant topics covered in 30+ group discussions (plus accompanied sessions and depths) over last 6 months Grocery shopping in supermarkets Fairtrade, organic, local produce, ‘ethical’ Discounter grocery retailers High Street takeaways/more upscale eating out Lunchboxes, soft drinks, cakes/sweet treats, home-baking (Health and wellbeing, hotels, cinema, savings and investment,
charity)
Rising prices emerging as a topic every time across this period -
to varying degrees
‘Top up’ research for this seminar - early June 20084 x groups, spread across lifestages, social class, retailers used and
where eat outFDIN Seminar June 2008 3
Feeling uncertain?
We are all very aware of the endless headlines re: price rises, tend to assume everyone else is just as engaged
Differing patterns of when people first noticed, what was noticed, and practical + emotional responses Earliest: price of groceries (and presents) pre-Christmas 2007, got
worse across the board since, in the news/people are talking
vs. Just awakening: petrol, maybe energy, some food - but only noticed
something in passing in past few weeks
FDIN Seminar June 2008 4
Triggers to price rise awareness
Cumulative effects - notice a series of rises and associated events, combined with personal situation and influences
Reach a tipping point - now not just a passing annoyance
May then need to reach a further point before taking any action
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Petrol
Gas/ electric
Food - total grocery bill
Food - specific items e.g. bread, milk
Prices Personal
Mortgage/ house values
Job insecurity
Illness
Personality type: face up to fears vs.
blinkered, denial
Family, children’s needs
External
Friends in difficulty e.g. redundancy
Follow news, politicsFull time job, prices
a work topic
£££
Noticing price rises
FDIN Seminar June 2008 6
“It’s the money, I pop in to get a few bits then come out
and I’ve spent £100”
“I think I read somewhere that the average shopping basket has gone up £15 per week”
“My gas has gone up so much that I thought I had a gas leak,
it’s that bad, I couldn’t believe it, I rang them up”
“You get less in the basket for the same amount of money”
“I’ve noticed it’s all gone up but you still get what you need”
“I used to go up the shops with £1 knowing that would get me
my loaf of bread, but now I take a fiver because I have no idea”
“Every time you look at petrol it’s gone up again”
Engagement differs
Most aware and responsiveMore downmarket, cash strapped, needs must Fixed or low incomes, reliance
on benefits/tax credits Pensioners, mums
andMore upmarket, outgoing, follow news and world events Some full time working, prices
a work topic, gives legitimacy Higher income but high
outgoings - mortgage, children, worry over house value
Less aware and/or less responsive
Usually quite blinkered, inward looking Often non working or part time/
local Family focus
Suspect some very fearful of disturbing status quo, degrees of denial What if breadwinner loses job? What to tell the children if can
no longer afford favourites?
Across social classes
FDIN Seminar June 2008 7
Whose fault is it all, anyway?End 2007/early 2008 tendency to blame greedy retailers, manufacturers and utility companiesMore recently, likely to understand that there are broader, cumulative forces at work Northern Rock, US sub-prime, ‘credit crunch’, greedy bankers Worldwide food pressures, links to climate and global warmingBut do feel that UK businesses and government should bear some of the pain, not seek to pass everything on to customers
FDIN Seminar June 2008 8
“The big supermarket’s profits are going up so it can’t be that
much of a crunch for them”
“It’s happening everywhere, so you have to make the best of it - and you feel like it’s not
necessarily in the supermarket’s control”
“All you hear these days is credit crunch, credit crunch, it’s something to
do with America and lending people money to buy houses they can’t afford”
“We all realise it’s a world thing, oil has gone up, but why do the
government still have to take the same amount of tax?”
Other significant trends
These do not suddenly disappear in the face of price risesOrganic, Fairtrade, other ‘ethical’ Prices more competitive as become more mainstream Free range chickens fuelled recently by Jamie, Hugh Dislike of over-packaging
Local/regional/named provenance Freshness, farmer’s markets, local shops
Higher quality, innovative prepared foods (M&S, Waitrose, Finest, Taste the Difference etc.)
Health in all manifestations Significance of labelling Avoidance of additives and over-processing Soft drinks and snacks banned from lunchboxes
Grazing, snacking, convenience
Diversity of eating out options, new cuisines FDIN Seminar June 2008 9
Other significant trends
FDIN Seminar June 2008 10
“I am spending more time looking at what the ingredients
are, you’re more aware”
“The quality of ready meals is much better than they were a few
years ago, and they’re more healthy, like the steam ones”
“M&S will introduce you to the farmer and the
strawberries will say what farm they’ve come from”
“Since Hugh did that chicken programme my chicken and eggs have to be free range”
“The price of organic is dropping down and down, the more the demand the
more prices will drop”
“You get things a bit more like you get in restaurants, pork and leek
sausages, aisles like World Foods”
“With Fairtrade I just feel like I’m doing my bit”
Responses to price rises
Five main behaviours
Ignore for as long as possible
Cut down on other things before food
Use different retailers
Change food shopping patterns
Change actual food purchases
…..and combinations of these
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1. Ignore for as long as possible
Some genuinely not that affected yet, high disposable income
Others blinkered, overtly not bothered, covertly scared of being forced from familiar comfort zone Loss of status, trappings of success - more upmarket Disturbing insular home and family
Busy mums can tend to pay for everything with cards, scarcely look at totals, just assume enough in account to cover Terrible shock if suddenly in the red
Petrol and gas/electricity prices often noticed before food
FDIN Seminar June 2008 12
“I don’t really look at the prices, I go in
and think ‘well I need that’ and pick it up”
“I think people are getting into debt because they just keep using their credit card, then when their salary comes in realising it doesn’t cover
the bill and they go further and further into debt, then you’ve got the mortgage problem”
2. Cut down on other things before food
Food a priority, so cut down on clothes, home improvements, going out
Use car less, watch energy consumption
Mums: spend less on self in order for kids to not go without Cancel gym, less/cheaper clothes, even eat less so can give to them
Eating out reduced Go less frequently And/or lower status restaurants, takeaway rather than go out Cook self rather than takeaway
FDIN Seminar June 2008 13
“A lot of people I’ve spoken to are tightening their belts, they’re
saying they don’t think they’ll eat out so much, or they’ll buy less
clothes, because they don’t know if their mortgage is going to go up”
“I’ve noticed that restaurants are a lot emptier, also that
there’s no need to book now”
“For dinner, if there’s not enough, I’ll make sure they have a proper meal and say ‘oh I’m not hungry, I’m just having something
on toast’ so they’re none the wiser”
2. Cut down on other things before food
Staying in as new going out DVD and takeaway rather than cinema and food Eating at home with friends rather than at restaurant Learning to cook more from scratch And even starting to grow own food
FDIN Seminar June 2008 14
“We’ve started growing some of our own stuff in a small way, we have fruit
trees in the garden, tomatoes, beetroot, that sort of thing”
“We’ve been through all the convenience meals, I think we’re coming out the other end, back to cooking and
growing your own”
“I’d rather cook at home and watch a couple of films, the
cinema’s too expensive”
“It’s just so nurturing, you feel like you’re
going back to nature”
3. Use different retailers
Promotions-conscious, shop around for best offers Internet comparisons make easier, but practical time limitations
Internet for bulk, save on petrol
Experiment with ‘cheaper’ mainstream retailers e.g. Asda for branded bulk goods Morrisons - shops within shop suggest freshness
Use local/alternative retailers more - freshness and quality as much as savings Greengrocer often cheaper (and fresher) than supermarket Feels like supporting local farmers and less food miles if use butcher Farmer’s markets in cities, farm shops in more rural areas Organic boxes
Resistance to ‘local’ formats of grocery retailers e.g. Tesco Express - price premiums and lack of offers compared to main stores
FDIN Seminar June 2008 15
Use different retailers
FDIN Seminar June 2008 16
“I have started using more of the local shops, the
local greengrocer is much cheaper and the fruit &
veg stays fresher longer”
“Go back more to seasonal and local products”
“I’ve got time to go from shop to shop and get the various offers, then I cook it from
scratch, so it’s a lot cheaper”
“I think you spend less on the internet, you only buy what you want, if you go
shopping you see all these things”
“The trouble with the big supermarkets is that
you’re bombarded with food, too many choices”
“I went to a fruit and veg shop, and you can buy two bags for less than £10, and it’s fresh, it lasts longer”
3. Use different retailers: discounters
Aldi, Lidl, (some Iceland) Long term use for cash strapped, pensioners etc. Still some stigma for blinkered, a sign of failure? But increasing use across classes and ages - quite ‘smart’, Primark
analogy, shop at Waitrose and Lidl Trial and error, friends recommend specifics Unknown ‘foreign’ brands assumed to have status in country of origin Cheap, fresh, loose fruit and veg
FDIN Seminar June 2008 17
“I have a friend who had this beautiful ice cream and I asked where it was from, she
said Lidl and I couldn’t believe it”
“Their vegetables often come down to half price and they are very good, very fresh, and they are loose so you can choose
what you want”
“There’s nothing wrong with the stuff, the quality is all right, it’s just
not packaged the same”
Discounters become a ‘smart’ choice
FDIN Seminar June 2008 18
4. Change food shopping patterns
Significant increases in commentary about food wastagePartially because food costs more, so see far more £££ being literally ‘thrown away’
Also pressure to recycle (food in some areas) increases awareness
Waste minimisation strategies
‘Big shop’ less frequent, with less fresh food
Avoid biggest supermarkets temptation too great
Shop every few days for what know is needed
May use high quality retailer (Waitrose, M&S) justified by so good that none thrown away
Flexible sizes e.g. loose fruit and veg, buy from deli
Use up or freeze leftovers
Reject other waste i.e. anything over-packaged
FDIN Seminar June 2008 19
Food (& other) wastage
FDIN Seminar June 2008 20
“Why are they still using horrible plastic bags for veg?
- they should be paper”
“I’ve got a lot of wastage in the fridge, I’m trying to cut down on it by buying fruit and veg locally every 2 to 3 days rather than buying it in
the supermarket and throwing it out”
“There is a general awareness of what’s going on, you do think more about what
you’re doing, what you’re throwing away, we shouldn’t be wasting all that food, especially
when you’ve paid so much for it”
“You should buy loose mushrooms in a paper
bag rather than in a box and with plastic”
5. Change actual food purchases
Buy more:On promotion, but only if will use - otherwise wastage BOGOF’s great, cook/freeze vs. reject as lack storage space, or not use
On sell bys, especially high quality half price e.g. Waitrose
Cheaper variants, but only if proven quality by trial/error Own brand, ‘Value’ lines, foreign deli items with assumed quality If disliked, poor value
Ingredients and recipe aids e.g. spices Cooking more from scratch and looking for help and inspiration
FDIN Seminar June 2008 21
“We cut back in small ways, don’t go out to eat so much, then look more towards the Sainsbury
cheaper versions”
“Every store is doing something, some
compensation for the prices going up, get this free, get all of this for a
tenner”
“I’ve started timing when I go shopping, it’s ridiculous, I know when they are going
to reduce it!”
5. Change actual food purchases
Buy, could be more or less frequently:Genuine high quality, still need some treats Instead of eating out - current M&S £10 promo of 2 x meals and
desserts + bottle of wine Hard to make from scratch - buy from restaurant or deli? In tune with other trends e.g. natural, organic Or as consolation e.g. booze, chocolate
FDIN Seminar June 2008 22
“M&S are addressing the fact of people not having so much
money, but still wanting to have the experience of eating out”
“I think people are enjoying eating in more, with my group of friends it’s like ‘I’m going to cook this, you bring the wine,
you bring the dessert’ ”
“I do make sure I have my wine, I think ‘why shouldn’t I?!’ ”
“Things like organic have become important to me, I’d probably buy
less but keep the quality”
5. Change actual food purchases
Buy less or none:Over-packaged convenience foods Especially if cannot justify via health, freshness
Unnecessary small indulgences e.g. ‘Instant’ cappuccino Cereals with ever more exotic ingredients
Things some people can make quite easily e.g. basic tomato pasta sauce - others would still buy packaged
‘Big ticket’ regular luxuries e.g. top-end desserts
FDIN Seminar June 2008 23
“I look at the ready made desserts and think ‘why are you thinking of buying that,
what’s in that?’ ”
Experiences of economic uncertainty
15+ years of growth, last economic ‘blip’ lasted from Big Bang into the early 90’s
Responses to current climate therefore very variable by age Youngest have no direct experiences, maybe some tales from their
parents - can embrace as a novelty Mid-aged the most apprehensive, as more likely to have dependent
kids, mortgages - and some previous memories of downturns Oldest have seen the cycle a number of times, more accomplished at
cutting back - but fearful if on low fixed incomes
Some feeling across demographic groups that we’ve had ‘cheap
food’ for almost too long, maybe an overdue adjustment?
FDIN Seminar June 2008 24
“£2.99 for a whole chicken, it’s not a bargain, it’s too cheap”
We just take everything for granted, maybe we need to go through a few
hardships and be more prepared for it”
What about food ethics?
Some say that lack of ethical behaviour, global warming etc. has exacerbated current food shortages and higher prices
Price rises do not mean we all suddenly forget our learned environmental awareness
FDIN Seminar June 2008 25
Price risesEnvironmentally
concerned behaviour
Can reconcile: good quality, less wastage, give more of my time, a return to “good housekeeping”
Home focus a defence against uncertainty?
Differing responses to uncertainty
More upmarket, intelligentsia, maybe no kids Catharsis, novelty Eat in, cook more from
scratch, use leftovers Local, organic, grow own Buy ½ price on sell by at
Waitrose, try Aldi
FDIN Seminar June 2008 26
Inward-looking mums Fear, difficult to even
articulate Cut back for self Try to preserve kid’s
lifestyles as long as possible
Older, kids leaving/ left Pragmatic, “here we go
again” More time to shop
around for offers, buy less more frequently
Also cook more from scratch, growing own
Poorest - across lifestages Buy less and/or lower quality, as fixed budgets
Buy money off offers, not BOGOF’s, shop around for cheapest Use the discounters
NPD themes and triggers
Value Not necessarily low price, but adding value through needs insights e.g.
embrace feelings of catharsis, feels like homemade
Polarisation Everyday prudent shopping and cooking
vs. Allowable luxuries, justified by quality, local produce, complexity etc.
Minimising wastage Food/portion size flexibility + quality Less packaging
Inspiration Everyday meals from scratch, leftovers Cooking to entertain others
Channels Smaller, more local shops - independents? Discounters? New formats from
main retailers? Restaurants providing takeouts for home use?
Communications sensitive to mood of the times - no more gloating bankers!FDIN Seminar June 2008 27
Thank you