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U.S. Consumers are Spending Less

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A recent trend has effectively stalemated the usual upwards cost by food producers and manufacturers. If the flailing economy has taught present day consumers anything, it is how to stretch money longer and more efficiently. The Great Recession has made a great impact on the consumers of the modern day, cheaper and more frugal spending tendencies have taken priority over the more carefree shoppers of the past. So let’s examine how consumers are spending less.

The Impact of Consumer Trends on the Grocery Billspending

The U.S. government has recently released statistics on consumer behavior and the response by food retailers and manufactures in the last couple of years. The studies are finding that due to the ever present financial threat bearing down on the average American, consumers are looking at better ways to stretch their money out. In some forms, this is seen as customers trade in brand name products and buy more store brand items. Even if it less of a digestive consumable and looking at hygiene and grooming store brand items. The impact of this type of consumer trend, is forcing many companies to shy away from raising their prices in order to maintain their current customer base. Experts who have been studying the effects of the Great Recession have speculated, and thus far have proven to be correct in their claims that the harsh undertones of the economy have wounded the consumer’s way of purchasing products, not only tarnished them. What this means is that consumers are paying less for higher brand name items and purchasing more cheaper versions in order to continue spending less with every visit to the grocery stores.

Fast Food

Fast food establishments which in the past have profited from their ability to crank out products at a relatively cheap cost, are noticing an offset of their profits in recent months. While the dollar menu at McDonalds or Burger King many look appealing to average U.S. consumers looking to get lost in the fast food experience to help forget the stresses of the day, but consumers are not only watching how they spend their money; they are watching what they are spending their money on. The cost of the dollar menu to the consumer is not quite as steep as it is to the producer. In recent months the cost of produce and dairy have risen throughout the country. In order to further subsidize the rising costs and still maintain a low price, fast food restaurants have done one of two actions. Many have changed the terminology of the dollar menu as to refer to costing up to an beyond a dollar. Or the second, as McDonalds did last year, has gone and eliminated the dollar menu all together in order to justify being able to raise its prices to combat higher production costs from infringing on company profit.

Consumers On Strike

Walk into any labor relations class and the professor will tell you that historically when a work force goes on strike, they tend to lose more than they aim to gain by going on strike in the first place. The difference between labor relations and the consumers, is that if the consumer boycott purchasing a type of food or food chain, the industry as a whole feels it. As stated before produce and dairy prices have been most noticeably raising in recent months. The pattern of consumer trends and the patterns of product being purchased have shown retailers that the consumer cares less about name brand and more about value for their money. That being said, if the consumer goes on strike and stops buying name brand milk, for example, it is likely to see a sharp decline in sales for that particular name brand product.

spending 3Spending Power

The only variable that has continually been overlooked by industry analysts seems to be the spending power of the consumers. While it is important to try to understand and predict how consumer trends will shift, it is equally important to understand the spending ability of consumers as well. The economy according to experts is starting an upswing but many Americans have yet to feel any sort of relief. Many consumers simply do not yet possess the ability to spend frivolously on higher priced products or items that remain on the market.

To begin to see any real change in the markets, one must first understand why consumer trends are shifting over time. That being said the reason that U.S. consumers are still spending less on food is because of the state of the economy and continued impressions it has left on those working and consuming in it. The spending power of the consumers have thoroughly proven that depending on how consumer choose to spend their money, will continue to dictate how the industries react accordingly.



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