business news in context, analysis with attitude

by Michael Sansolo

Is the world changing yet again and if so, is it a bad thing?

In just the past week, signs of this change were everywhere.

• The New York Times ran a story (picked up in different fashion by media everywhere) about consumers returning to a frugal mindset, tracked through a substantial uptick in the national rate of savings.

• The Washington Post had a short article about spaving, a hip new word meant to describe when shoppers buy a lot of an item to stock up on a cheap price.

• Conservative columnist Michael Medved weighed in on the “silver lining” of the economic downturn in USA Today, citing the increased savings rate and a reduction in divorce and families moving.

The connection of these changed circumstances to the world of food retailing was summed up by a General Mills executive, who weighed in with an interview about the possibility that eating-at-home really is back to stay. Which begs the question of whether the economic downturn created a perfect storm of opportunity for the supermarket industry?

The answer is: it’s possible.

After all, consumers looking to save money have clearly returned some spending to the supermarket and in the process might have found that cooking can be much easier these days; that stores are more convenient to shop; and that buying less expensive store brands doesn’t necessarily mean poorer quality. What’s more, shoppers may have found that meal time around the kitchen table actually provides some unexpected benefits of family bonding.

Clearly, the economic events may have given supermarkets the marketing opportunity of a generation. The question is: now that the door is open, what will everyone do?

Shoppers, as we know, can be fickle. The advantage frugality has over frivolity today could switch in a second when the economy returns to more solid ground. The opportunity is there only if the industry keeps making the sale on all the facets of value.

Likewise, shopper concerns are likely to move in many new directions, some very challenging. The Times also wrote recently about “The Story of Stuff,” a viral video that boasts millions of views. It’s a 20-minute critique of America’s consumption habits and challenges shoppers to rethink exactly how and why they buy so much. Whether you agree with the argument is irrelevant if consumers’ feelings on frugality and values extend in new directions.

And then consider McDonald’s. In the past few years, the fast food giant resurrected its image, sales and profitability with a host of unorthodox moves. Blending low price and perceived quality with offers as divergent as the dollar menu and the McCafé drinks and angus burgers, McDonald’s is building powerful new links to its shoppers by changing the nature of value in its stores.

The challenge for supermarkets is how do to the same: how to blend the relatively inexpensive prices of food products with the benefits of healthier eating, convenient meal preparation and more. What’s more, can we seize this opportunity with élan, educating shoppers on how to improve their cooking, using new recipes, new flavors and new products to make family meals more exciting than ever? And there is so much more.

At least until new normal shifts again.

Michael Sansolo can be reached via email at .
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