an uncertain economy fdin seminar june 2008 qualitative insights 1

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


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


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


“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


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


“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


“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


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


“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


“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


“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


Use different retailers


“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


“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


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


Food (& other) wastage


“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


“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!”


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


“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”


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


“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?


“£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


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


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

an uncertain economy fdin seminar june 2008 qualitative insights 1

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