Most Consumers Didn't Spend Stimulus Cash on Groceries: Survey

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Most Consumers Didn't Spend Stimulus Cash on Groceries: Survey

Although grocers worked hard to get consumers to spend their economic stimulus checks at supermarkets, the majority of U.S. consumers said they didn't spend their money from the government on groceries, according to a survey released by Precima, a Toronto-based retail analytics firm.

Out of 1,948 consumers surveyed during the first half of June by ICOM Information Communications, 1,317 said they had received their stimulus checks; but 1,106, or about 84 percent, said they didn't spend the money on groceries.

In other key results from those 1,106 respondents who spent their stimulus checks at other places besides supermarkets:
--82 percent have cooked at home more in the past six months, instead of eating out;
--72 percent have made fewer trips to buy groceries in the past six months;
--89 percent have shopped at the same grocery store for the past six months.

"The grocery industry didn't convince the American consumer that maximum return on stimulus checks could be achieved right in the supermarket aisles," noted Precima general manager Brian Ross. "The average family of four's $1,800 rebate equates to about three months of grocery buying, a prime opportunity for stores to influence shopping behavior. The rebate checks were a missed opportunity for grocers, as consumers in this economic environment opted to earmark the funds for other uses -- paying down debt, spending on necessities like gasoline and utilities, or putting into savings."

Precima's scan of grocery marketing tactics in the second and early-third quarters of 2008 found that grocers were mass-marketing or implementing gift card promotions as a way to lure rebate spenders. "Supermarkets are sitting on a wealth of aggregate inventory, sales, and customer data from frequent shopper programs," noted Ross. "Instead of limiting their promotions to gift card offers, grocers could have used loyalty data to identify more relevant incentives for shoppers to spend their rebates at the grocery store."

Ross advised grocers leverage their retail customer data when creating promotional offers. He suggested:
--Instead of one-size-fits-all promotions, analyze loyalty program data to pinpoint store items that are most important to cash-strapped customers, and develop incentives with the greatest cost-saving appeal.
--Facilitate one-stop shopping for shoppers and help fight rising fuel costs by providing offers linked to saving gas and larger basket sizes.
--Capitalize on consumers' desire to economize by eating at home with offers tied to convenience items to replace takeout or restaurant meals.