Nielsen: Price, health drive buying decisions all over

Food shoppers worldwide are in the same boat—price is their #1 influence on grocery purchases.

Rising prices are the primary influences on food and beverage purchases for 85% of consumers in the North America, Latin America, Europe, Asia-Pacific and Middle East/Africa regions of the world.  Grocery prices have “major impact” for most (52%) of the 28,000 consumers from 56 countries interviewed online in 2012 by Nielsen for its Factors That Impact How We Grocery Shop Worldwide report.

In the category of small comfort, U.S. consumers have company around the world building their meals at home on a budget. This is significant for CPG companies seeking global growth, as well as retailers that operate internationally, we feel at F3. Without relief valves of free spenders to provide growth, stores are pressured to absorb some cost hikes rather than pass them all along to consumers, and CPG needs to find ways to offset higher ingredients and shipping costs, we observe.

Price is the consistent #1 factor in all parts of the world measured, ranging from 81% in Europe to 88% in Asia-Pacific. The North American figure is 83%, the Nielsen data show.

Of 16 factors examined worldwide for having “major impact” on grocery purchases, health ranked #2 overall, while transportation costs (the expense of traveling to buy groceries) came in at #3, package labeling was #4, and delist favorites was #5.

In North America, by comparison, the first four slots were the same, but retailer loyalty programs captured the #5 position.  

Looking closely at #2 health and wellness, the health factors that relate to physical condition impact grocery purchases for 75% of global respondents, including 38% who call the influence “major.” The next-highest priority is food label information on packaging, which influences 73% of the survey takers, including 31% in a “major” way.  A separate Nielsen study, the Global Food Labeling Report from this past January, shows the skepticism consumers feel towards health claims:  59% say that have difficulty grasping nutritional facts on product packaging, 52% say they understand labels “in part,” and 7% not at all.

Other health and wellness purchase shapers are:  food allergy factors for 60% of worldwide consumers (26% “major”); availability of products with enhanced nutritional benefits for 67% (25% “major”); and availability of organic product options for 65% (24% “major”).

Regarding #3 transportation costs, Nielsen suggests that fuel incentives (as at Walmart and Kroger) be part of retailer loyalty programs, especially with “contingency plans that account for swings in gas prices during peak months when prices typically rise.”

Calling delisting of a favorite product “a clear pain point for shoppers,” Nielsen urged marketers to “understand how much demand could shift to other products in the assortment, and how much business could disappear altogether.” Seven in 10 consumers (69%) said this impacts their shopping (29% “major”).

Loyalty programs rank #5 for “major impact” in North America (24%) and Europe (22%).  Why such popularity? More than half (52%) worldwide like special prices the most, followed by accumulating points and redeeming gifts (31%), the data show.