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IRI EXECUTIVE INSIGHTS

 

Retailers and manufacturers must now consider whether shoppers are trading up or down—are they trading down and buying less to save money or trading up and increasing consumption at home in lieu of cutbacks to onpremise consumption? They must anticipate if purchases will be reduced or eliminated and whether or not consumers consider alcohol an “affordable indulgence” on which they are willing to splurge.
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Another major change underway is a transformation in how Americans research, purchase and use healthcare. Healthcare is costly, and people are rethinking how they take care of themselves in order to conserve funds. Instead of sticking with their tried-and-true healthcare options, consumers are aggressively seeking affordable solutions for health and wellness, both in terms of how they obtain care and in the healthcare products they choose.
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As the summer 2009 season continues, many consumers are revisiting their budgets to determine what kind of excursions, vacations and other adventures will fit into their more frugal lifestyles, as well as take a new look at their summer meal rituals.
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Experts have made so many prognostications about the recession’s duration that at least a few are bound to be correct. But the central question for the consumer packaged goods (CPG) industry focuses not on when the recession will end, but how shoppers will behave five, 10, and 20 years into the future.  IRI forecasts that today’s shoppers will adopt many of the practices Depression-era shoppers implemented both to weather the recession as well as to keep a close eye on spending long after the recession ends. IRI has dubbed these shoppers the “Downturn Generation.” 

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During the current U.S. recession, change in consumer spending is happening faster, more frequently, and is less predictable than ever before. Within the CPG industry, escalating prices and stagnant wages have bred exceptional price sensitivity, resulting in lower demand in many categories, growth in private label / lower-tier brand share, and accelerated channel migration.
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