business news in context, analysis with attitude

The new edition of Facts, Figures & The Future out today, reports that as newspapers and television news report how the impact of Hurricane Katrina will further drive up record high gasoline prices, an exclusive survey of ACNielsen's Homescan consumer panel suggests that gas prices were taking a toll on consumer spending even before the storm hit.

The survey “found households are combining errands, eating out less often, and doing more at home in order to control the cost of gas. As gas prices are expected to continue to rise as a result of the hurricane,” F3 writes, the expectation is that “these findings are just the beginning of a trend of more conservative shopping behaviors that should continue through the end of the year.

“The high price of fuel is impacting different consumer segments to varying degrees, with a higher proportion of poor households than affluent households stating that they are using coupons more often (23% vs. 14%) buying less expensive brands of groceries (20% vs. 10%), opting for a lower grade of gasoline (19% vs. 12%), and reducing spending in other areas "to a great degree" (15% vs. 5%).”

According to F3, “the longer-term impact may well create further opportunities for one-stop-shop retailers like supercenters and warehouse club stores to win more day-to-day shoppers. For supermarket operators, it's time to promote the convenience of their store locations and the value of their take-home meals. As more consumers do more at home, this trend should underscore the opportunity for brands to enhance the at-home entertainment experience.”

F3 also reports, among other things, on the importance of sports marketing, he trend toward moving decongestants and cold medicines behind the counter, the new trend toward home DNA testing that will give consumers information about their genetic predispositions, and the emergence of organic private label products.

And, Phil Lempert writes:

“Two weeks have passed since Hurricane Katrina's devastation was felt on the Gulf Coast. News reports continue to monitor the thousands of homeless and hungry as the nation tries to figure out just went wrong with our warning and rescue services.

“But there is another story that isn't making the news - and should. Retailers across the country are helping our fellow Americans.

“Wal-Mart jumpstarted the national fundraising with a $15 million donation and is setting up "mini-Wal-Marts" in the hurricane zone offering products including food, water, clothing, diapers, baby wipes, baby formula and bedding at no cost to those in need.

“Safeway is matching employee contributions and has already delivered an initial check for $100,000 and has donated 10,000 American Red Cross Emergency Preparedness Kits.

“Supervalu donated $50,000 and is delivering food, water and other supplies to the region.

“Food Lion made a donation of $250,000 and sent four truckloads of water and food to Picayune.

“Brookshire Grocery is matching donations up to $250,000.

“Meijer sent three trucks loaded with food, water, juice and baby formula to the neediest areas in Mississippi.

“Grocery Outlet chartered a plane loaded with 20,000 bottles of water and 27,000 cans of food - enough to feed 25,000 people.

“The list of retailers and their efforts could go on for pages, and I apologize to those in advance that I have not listed here because of space. Your efforts and donations prove to all of us just how great an industry we are - and I for one am very proud to be part of the food world.”
KC's View:
‘Nuff said.

To get your copy, go to:

F3 is a joint production of the Food Marketing Institute (FMI), ACNielsen, and Phil Lempert.