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Food for thought: More families are turning to home-cooked meals
Tuesday, July 08, 2008

The lights are going back on in America's dining rooms, according to a Chicago retail intelligence firm. People are learning to cook again.

Yet, the nation isn't going back to the 1950s, when mothers invested hours in making a big meal from scratch. "It's the home-cooked meal in 20 minutes or less," said Thom Blischok, president of consulting and innovation for Information Resources Inc., which surveys consumers on their attitudes and tracks spending behaviors.

Figuring out how the millions of individuals who drive the nation's consumer-fueled economy are coping with high food prices and even higher fuel costs has been a priority for researchers and consultants who work with retailers and manufacturers. Few businesses foresaw the rapid increases that this year has brought, but they all must adapt.

To no one's surprise, industry queries are uncovering change and lots of it, leaving grocers and food companies, convenience stores and shampoo makers sorting through to find the opportunities.

Shoppers are trading down, Jim Hertel, senior vice president of consulting firm Willard Bishop in Barrington, Ill., told participants on an online discussion last month about the future of food retailing. Limited assortment stores such as Aldi and such wholesale clubs as Costco and Sam's Club are gaining market share, while traditional grocers are fighting to hang onto their slice.

Yet, prepared food offerings at supermarkets and convenience stores are picking up sales as consumers look for economic alternatives to restaurants, according to Technomic, a food service and restaurant consulting firm in Chicago. That sector could grow 5 percent this year, the firm predicted.

Total shopping trips are down 3 percent as consumers try to maximize savings while using as little gas as possible, according to IRI research. People are stocking up on bigger packages at the beginning of the month, then filling in with small ones toward the end of month to stretch the supply out until payday.

Mr. Blischok said he had found the evidence "sobering," in that it shows almost every income level affected by economic issues.

Almost half of consumers with household incomes below $55,000 reported they were having difficulty buying groceries, based on interviews with about 1,000 people. More than 50 percent are cooking more from scratch and buying fewer convenience foods, according to IRI. Some indicated they might switch to less healthy foods because they perceived those might be cheaper, something that could provide an opportunity for grocers interested in showing that doesn't have to be true.

The rise in home cooking, modern style, is helping sales of pots and pans, Mr. Blischok said. Families that used to buy four different kinds of shampoo -- one for every member -- are switching to a single bottle for all. At-home beauty treatments are gaining favor as a way to cut costs.

Meanwhile, increased sales of vitamins, pain medicines and first-aid items point to a trend toward trying to handle more health care issues without expensive medical help, even while consumers continue to indulge in their favorite cookie or pricey ice cream. "Everybody is going to hold onto one or two things," Mr. Blischok said.

Take wines. A tight economy might be expected to cut into sales. IRI has found that's not exactly what's happening. "People are buying affordable wines to take them home," he said. That may be less expensive than buying a bottle at a restaurant.

If the inflationary cycle turns out to be a short-term issue, some consumer behavior may revert to previous patterns. But at Willard Bishop, the researchers are predicting food price inflation could last three years or longer.

Without some relief, people may find even more creative ways to choose between what they want to afford and what they don't consider essential, Mr. Blischok said. "We're just touching the surface here."

Teresa F. Lindeman can be reached at tlindeman@post-gazette.com or at 412-263-2018.
First published on July 8, 2008 at 12:00 am
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