The worldwide economic slowdown has resulted in a significant decline in consumer spending as retailers of all types have been affected. But while people may hold on to their cars longer or put off the purchase of a new handbag, they all must eat. Even grocers are seeing a big change in how consumers are spending their money. According to new Nielsen research prepared for the BBC, food shoppers are spending their money on more basic items such as white bread, baked beans and other staples.
Sales of standard sliced white bread have climbed sharply since August 2008 - as much as 55% in one month. Baked bean sales rose 22.6% in December 2008 compared to a year earlier, leading some analysts to conclude that the traditional British beans on toast meal is replacing a more substantial meal.
Interestingly, sales of olive oil, once considered a luxury product, showed growth of 6.5% in December 2008 versus 2007, suggesting that consumers have come to believe that it is an essential part of cooking at home.
Not surprisingly, categories that are considered "luxuries" have shown a decline, including sparkling wines (down 2.3% in December 2008), champagne (which is not included in the sparkling wine category). Sales of organic products fell by 11% in December.
The good news for grocers is that sales of their own private label brands have shown tremendous growth as consumers discover the value offered by them. From August to November 2008, monthly sales in this category have risen by about 30%.
"Budget own labels are big news at the moment. Retailers will put more support behind their own label lines and will introduce more product variety, so I expect solid growth in this category all year," said Danielle Tolson of Nielsen's Consumer Group in London.
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