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Canadian Consumers Are Worried

After years of “shop ‘til you drop” consumers are looking for value


June 22, 2009
By Jim Knisley


Topics

Canadian consumers are worried. They are worried about the economy,
they are worried about their jobs and they are worried about the cost
of food, according to a researcher who has taken a hard look at
consumer attitudes.

Canadian consumers are worried. They are worried about the economy, they are worried about their jobs and they are worried about the cost of food, according to a researcher who has taken a hard look at consumer attitudes.

Tony Marino of the Neilson Company said Canada fell steeply into recession in the last quarter of 2008 and that battered consumer confidence.

f4 
Tony Marino of the Neilson company says consumer demand and managing operating expenses will help
poultry producers weather the economic storm.


 

In response, almost two-thirds of Canadians reported that they were cutting spending and that number seems headed higher as unemployment rates rise.

Among consumers’ concerns is the rising cost of food. Food prices are up more than seven per cent year over year and 87 per cent of Canadian consumers are concerned, he told the annual meeting of the Ontario Broiler and Hatching Egg Commission.

These concerns were elevated earlier this year when food prices rose seven per cent in just 12 weeks.

“Canadians are aware of this and are responding with their feet and their wallets,” he said. They are limiting their trips to buy groceries, which is a continuation of something that started a year earlier because of high fuel prices.

This means retailers have fewer opportunities to get consumers into their stores and entice them to buy. Consumers are also buying more in bulk to reduce costs and travel.

Marino said the big picture revealed by the survey shows that 31 per cent of Canadians felt they were unaffected by the recession. “They tend to be wealthier,” he said.

However, 69 per cent are concerned and responding. Thirty-seven per cent are seeking out sales and lower prices, 14 per cent are “brand disloyal,” have deserted their usual brands and are buying based on price. Eight per cent
say they are promotion sensitive and looking for special bargains.

But 11 per cent of consumers are “panic stricken and doing everything they can to reduce spending.”

While consumers are looking to cut back, not all food categories are created equal.

Fresh meat and seafood have been the least affected and chicken has been less affected than other meats. “Demand is holding up,” he said.

A major reason is price. Chicken has the lowest price when compared to beef and pork and is considered a bargain by many shoppers.

“Chicken demand is holding up because it offers excellent value for the money,” he said.

For poultry producers their ability to weather this economic storm will depend more on their ability to manage operating expenses than on consumer demand, he added.

The current situation is straining Canadian retailers and food companies. A lot of competition entered the grocery market in recent years forcing retailers and food companies to control prices to maintain sales. “But they can’t hold off any longer. They are downsizing the packaging and raising prices.”

Store brands or generic products have also re-emerged as a force. They are generally sold for less than name brands and are well positioned in this kind of market.

Meanwhile a recent Ipsos-Reid poll showed that Canadians’ top concerns about Canadian farming are related to the economy. The other top concern is food safety.

Topping the list of concerns is the sustainability and profitability of farming followed by costs to consumers and food safety.

While more than 95 per cent of Canadians felt they knew little or nothing about agriculture, 52 per cent of Canadians have a positive impression of Canadian agriculture. This is up from 42 per cent in 2006. The survey was conducted in February and included 1,194 Canadians.