Gas Prices May Be Super for Food Markets
By George Anderson
An editorial in one of the grocery industry’s trade publications says the high price of putting gas in cars may just be what supermarkets need to gain some traction for their businesses.
David Orgel, the editor-in-chief of Supermarket News, says that recent research by ACNielsen, which found that 31 percent of consumers are eating out less often because of high gas prices means they will be relying more on food stores.
“Call it restaurant-meal replacement (RMR), to turn a recent industry phrase on its head,” he writes.
The findings of the Nielsen research cited by Mr. Orgel have found support in a new study from Information Resources, Inc. According to IRI, consumers began shifting the allocation of their dollars away from out-of-home entertainment and dining.
John DeJesus, president/CEO of Foodmaster Super Markets in Chelsea, Mass., told SN that he has seen the shift taking place in his home market: “It started with the high-end restaurants feeling it a little bit, and now the middle-of-the-road restaurants are starting to feel the pinch. The only way [consumers] are going to make their dollars last longer is to buy groceries and cook at home, and cut out the extraordinary expenses – and going out to eat is one of them.”
IRI says its research suggests that shifts in spending have offered up some surprises. “Contrary to what some analysts expected, the channels benefiting most from the uptick in spending were the major CPG channels of trade – grocery, drug and supercenters; while dollar and club stores – sales dipped. The latter outlets were significantly impacted by rising gas prices due to their focus on serving either lower-income consumers, who have very limited disposable incomes (dollar store consumers), or highly cost-conscious shoppers, who may have switched to a one-stop shopping outlet in closer proximity to conserve gas (club store shoppers).”
Moderator’s Comment: Where should supermarkets concentrate their efforts to take advantage of the restaurant-meal replacement opportunity, as David Orgel
calls it? How can they turn this opportunity into a permanent (or at least longer-term) advantage? What should traditional grocers be looking for from competitive formats to avoid
having this opportunity swept out from underneath them? –
George Anderson – Moderator
- Gas Prices: Pizzeria’s Pain Becomes Supermarkets’ Gain – Supermarket News
- Rising Gas Prices Actually Boosting Consumer Packaged Goods Spending
in Major Channels – Information Resources, Inc.