IRI: Millennials gaining confidence in economy, boosting shopper index

CHICAGO — Shopper sentiment surged in the first-quarter 2015 amid optimism over the labor market, job stability, personal finances and gas prices, according to the latest IRI MarketPulse survey released Monday. While a first-quarter jump has occurred for several consecutive years now, this year’s spike marks the largest jump in IRI’s Shopper Sentiment Index since it was launched in 2011.

 

“Consumers tend to start each new year with a modicum of optimism,” said Susan Viamari, editor of Thought Leadership, IRI. “The fact that this year’s Shopper Sentiment Index spike is so substantial, and that the increase spans all age groups and all of the measures that comprise the index, is cause for optimism among CPG marketers.”

 

With a Q1 2015 Shopper Sentiment Index of 138 compared with 120 in Q4 2014, consumers definitely have a sunnier outlook and feel more confident. And millennials, in particular, are feeling more financially secure and optimistic with an index of 131 in Q1 2015 compared with 114 in Q4 2014 and 95 in Q3 2014. Millennials have struggled since the economic downturn began and have generally indexed the lowest among consumer age-based segments. However, the Q1 figures are the highest index levels for millennials since the inception of the Shopper Sentiment Index in 2011.

 

Overall, one-third of millennials feel the economy has improved in the last six months, and 28% expect even more improvement in the next six months. Still, 25% of millennials are having difficulty buying groceries, compared with 20% of the total population. So, it’s no surprise that deal seeking continues to rise among millennials, with 26% saying they buy more on deal today than a year ago. Among this cohort, 30% say that more than half of their most recent shopping basket was bought on deal, which is comparable to the total population.

 

Significant percentages of millennials are turning to the Internet to find these deals, including:

 

It’s not just millennials who love a bargain. While deal-seeking behavior has eased slightly during the last year, many consumers remain enthralled by a good buy. More than one-quarter (29%) of consumers estimate that 50% or more of their most recent basket was bought on deal, compared with 34% in Q1 2014. 

 

“CPG marketers should find relief in the continued improvement in shopper attitudes, but sharp withdrawal of value-focused programs would be a mistake,” concluded Viamari. “Conservative mindsets still prevail and, in the near term, purchase behavior and loyalty will be strongly influenced by products and programs that meet or exceed consumers’ expectations for great quality and strong results at a reasonable price point.”

 

Constructed against a benchmark of Q1 2011, IRI’s Shopper Sentiment Index provides insight into how the economy is impacting consumers and changing how they approach grocery shopping. The index provides perspective in terms of price sensitivity, brand loyalty and changes in spending required to maintain desired lifestyles. With a benchmark score of 100, a Shopper Sentiment Index score of more than 100 reflects consumers who are less price driven, more loyal to favorite brands and better equipped to maintain their desired lifestyles without changes as compared to Q1 2011.