US shoppers continue to trade down

07 May 2010

NEW YORK: Shoppers in the US are still trading down to cheaper brands in a variety of different categories, comScore, the research firm, has found.

The company argued that there has been a "significant decline" in the level of attachment consumers in the country have with specific products over the course of the last two years.

It suggested that the primary cause of this trend was that the recession had led to a change in preferences as customers were forced to rein in their expenditure.

As such, only 40% of respondents stated they had purchased the brand they "wanted most" in the household goods sector in March this year.

This constituted a 5% contraction on this measure compared with a similar survey conducted in the same month in 2008.

While this figure stood at just 1% for paper towels, it climbed to 11% for detergents, one major reason why organisations like Procter & Gamble have launched low-cost offerings in this area.

"There's a meaningful group of price-conscious consumers who continue to look for lower prices," Jon Moeller, P&G's chief financial officer, said on a recent conference call with investors.

"These consumers are driving double-digit increases on brands like Gain, Pampers Simply Dry, Naturella, Bounty Basic and Charmin Basic."

In the health and beauty market, comScore reported that a plurality of contributors bought their number one choice of toothpaste and shampoo in March, but even here totals had plummeted by 10% and 13% in turn.

"I think it's the responsibility of manufacturers who understand brands and consumers to create growth where price is a component, but not the only driver," Ian Cook, Colgate-Palmolive's ceo, said last week.

"The strategy is innovation and reaching consumers where we have great loyalty, which in the US is particularly the Hispanic consumers where we do very well."

Purchase habits in the food segment remained most consistent for items like soup, with 52% of people having acquired their preferred brand in March, off by a relatively modest 4%.

Pasta sauce, however, experienced a decrease of 8% to 45%, while fruit juice was off by an even more substantial 11% to 40%.

"The business [of] providing daily affordable products to lower income consumers in developed markets, is a key focus for us and will continue to be," Roddy Child-Villiers, Nestlé's head of investor relations, said in April.

In apparel, 61% of participants in comScore's poll had selected a second-best option when shopping for jeans in March 2010, an uptick from the rating of 46% in March 2008.

Small appliances also witnessed a double-digit shift over this period, with 34% buying their ideal gadget at the end of the first quarter this year, when 45% had been able to do in the same period two years earlier.

The proportion of the sample which said they "switched" from their normal brand if an alternative was available on promotion also jumped by a minimum of 4% in all the categories assessed.

Elsewhere, the share of the panel which opted for cheaper lines to save money rose by 12% for apparel, 7% for health and beauty, 4% for housewares and 3% for food.

Data sourced from comScore; additional content by Warc staff