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FMI Study: Shoppers Are Forsaking Supermarkets

CHICAGO - If consumers in financial straits have to choose between buying gasoline or groceries, gasoline often wins out, a Food Marketing Institute study has found.

"Given the economic environment, it is not surprising that more shoppers are buying food today in discount stores and other low-price venues than ever before," according to the report, which was released at the organization's annual trade show in Chicago.

"High oil prices, both at the pump and for home heating, depress consumers' ability to spend more," the study continued.

Gasoline prices have been rocketing upward by about 35 cents a gallon since December, caused by ballooning crude oil prices, said gasoline industry analyst Trilby Lundberg.

The FMI study said fuel price increases are upping the the pressure on personal budgets, which were already constrained by credit card bills.

"In 2003, for the second consecutive year, we detected among consumers that minus inflation, minus inflation, they are managing to buy their groceries for less than they did last year," Michael Sansolo, FMI's s.v.p., told the group's opening conference Sunday.

Consumers are trying to assauge their financial difficulties by seeking out less expensive places to buy groceries, the report said, citing an FMI-commissioned survey. The random telephone poll of more than 500 people, performed in January, had a margin of error of 4.5 percentage points.

The result is that supermarkets are losing customers, who are defecting to other retailers such as discount stores, according to the survey.

The proportion of respondents who said a supermarket was their main food store decreased by five percentage points since last year, to 72 percent, while the share of shoppers who considered a discount store their first choice increased by four percentage points, to 21 percent.

The report additionally said shoppers are looking for other ways to be more cautious in their spending.

More consumers said they were comparison shopping, checking in newspapers for sales, availing themselves of coupons and rebates, stocking up on bargains even if they didn't need the products immediately, and purchasing only what was on their grocery lists. Additionally, more consumers were writing out shopping lists, the survey revealed.

Despite such measures, though, the average grocery bills that the survey respondents reported showed little change. The average weekly bill decreased by $1, to $90, from January 2003.

Opposing the desire to save money was the desire to save time, something else modern Americans don't have enough of. The survey showed a rise in purchases of precooked foods, which are more expensive than the ingredients for from-scratch meals.

"The trend toward timesaving convenience foods from precooked pasta to cereal bars continues," the report said.
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