The market research firm’s third-quarter results from its Consumer Connect survey found more consumers are worried about the impact of a Trump victory on their financial health (62%) than if Clinton wins (57%), Susan Viamari, vice president of Though Leadership for IRI, told FoodNavigator-USA.
She explained that the election is giving consumers pause to consider their financial position and, given how close it is to the holidays, seasonal spending will suffer as a result.
In particular, she said, the survey revealed 30% of consumers plan to spend less this holiday than last year, while 55% will spend the same.
A closer look at the 47% of consumers who say they already feel strained financially reveals two-thirds of this group feel things will get worse before they get better. A whopping 54% of this group also says that they will spend less on holiday shopping in 2016 than 2015.
The uncertainty that comes with changing leadership in the White House is only one factor contributing to this shift, which actually began a few years ago, IRI data shows.
“This is the first year that we have had the Consumer Connect survey,” but “for the past several years, we have been running the Market Pulse survey. It is not an apples-to-apples comparison, but we have seen frugality for several years now, though there has been a small group of shoppers [about 10%] that are loosening the purse strings,” Viamari said.
The impact of tight times on food spending
No matter the cause, the impact on the food and beverage industry will be notable with 41% of survey respondents who feel financially constrained saying they will cut back on food and beverage spending. Almost a quarter of the general population also will cut back, according to IRI.
Even though many consumers will watch more closely what they spend this season, Viamari says there are ways CPG manufacturers can engage with shoppers to encourage spending.
“In general, consumers have been looking for opportunities to save – clipping coupons, taking advantage of loyalty card discounts, shopping across retailers,” she said.
According to the survey, 61% of shoppers who feel financially squeezed will clip coupons from circulators and newspapers, 44% from email and 16% from social media. This is slightly higher than the general population.
In addition, 31% will take advantage of promotions found online compared to 28% of the overall population.
Offering coupons and deals also is a good way to connect with consumers before they get to the store, Viamari said.
“List making is pervasive!! So, brands need to be top of mind during this process,” she said.
Impact at point of sale
For brands that don’t make shoppers’ lists, they can still capture consumers at the point of sale with on point messaging, Viamari said.
“Messaging is critical. Brands must have a clearly defined and effectively communicated value proposition and that proposition must take into consideration how consumers think. Consumers think about usage occasions, not categories,” she said.
She added, “So for instance, they are thinking about breakfast/morning eating, rather than cereal. The competitive set is the brands that are competing for that usage occasion. So, the messaging must be the same. And, of course, it must address consumers’ most pressing desires for that occasion—may be quick and easy, may be nutrition, may be warm and filling, may be lowest price, etc.”
Some splurging still in the forecast
While consumers are cost-conscious, many also want to splurge on their holiday meals – creating opportunities for brands to boost basket size and sales, Viamari said.
“There is definitely opportunity to drive basket and margins this year,” she said, noting 17% of consumers will buy additional or unplanned items upon seeing deals in the store, and 9% will buy premium and gourmet items.
“We see these opportunities higher among certain shopper groups, such as higher-income shoppers, younger boomers and singles,” Viamari said. “This really speaks to understanding the core shoppers and dialing program into those that are most likely to respond.”