IRI MarketPulse Survey Finds Festive Yet Frugal Holiday Celebrations Are on the Menu for Consumers This Year

Shopper Sentiment Dips Again in Q3 2015 and Dampens Spending on Holiday
Celebrations

CHICAGO–(BUSINESS WIRE)–Shopper sentiment took another hit in Q3 2015, marking the second
consecutive quarter for a sharp decline in confidence, according to the
latest IRI MarketPulse™ survey. Consumers are feeling the pinch
due to strained personal finances, stagnant wages, and rising health
care and education costs, which will be impacting upcoming holiday
celebrations. In fact, the IRI Point of View, “Holiday
2015: Making a List and Checking It Twice,” takes a closer look
into the hearts and minds of this year’s holiday shoppers and finds that
32 percent of consumers are planning to spend less on holiday
celebrations this year. In addition, the accompanying infographic “Frugality
Is on the Holiday Menu” highlights exactly what shoppers
will be putting on their tables.

“We’re taking a deep dive into those four crucial weeks following
Thanksgiving that span Hanukkah and Christmas to determine how merry the
holidays will be for CPG retailers this year,” says Susan Viamari, vice
president, Thought Leadership, IRI. “Unfortunately, it’s shaping up to
be a rather lackluster season. Still, marketers must keep in mind that
two-thirds of U.S. consumers say they want to prepare the best meals
possible. The trick to capturing maximum share of wallet this season
will be to target consumers carefully and get on the all-important
shopping list.”

IRI Shopper Sentiment Index Takes Sharp Decline in Q3 2015 Among All
Age Groups

Constructed against a benchmark of Q1 2011, IRI’s Shopper Sentiment
Index provides deep 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.

The index dropped to 119 in Q3 2015, versus 123 in Q2. It’s also lower
than it was one year ago, when it came in at 121, leading up to the 2014
holiday season. Sentiment is down across all age groups, with
millennials indexing at 103. While this is still a low index compared
with the index as a whole, it is higher than it was in 2011, 2012 and
2013, and also up from Q3 2014, when millennials indexed 95. However,
millennials still index well below that of older shoppers, with those
ages 35-54 indexing 123 and those ages 55-plus coming in at 122 in Q3
2015.

Younger shoppers are still feeling the pinch a bit more than their older
counterparts, though. Slightly more than half (51 percent) of 18- to
34-year-olds made numerous cutbacks during the past six months, compared
with 37 percent of those ages 55-plus.

Simplicity Is the New Sophistication This Holiday Season

Consumers are heading into the holiday season with a conservative
mindset. While they still want to make a splash with holiday
celebrations, 32 percent expect to spend less this year than they did in
2014. Overall, this adds up to relatively flat sales for the upcoming
CPG holiday season. To make the most of opportunities this season, it’s
important for marketers to reach consumers before they head out the
door, because pre-planning and deal seeking will play a major role in
their money-saving efforts:

• 62 percent will prepare a list at home before heading out to the store
• 54 percent will clip coupons from newspapers/circulars
• 34 percent will rely on private label solutions
• 29 percent will redeem credit card/store points for product savings

Sunnier Outlook for 2016

Even though consumers are currently feeling a bit strapped, they are
optimistic about 2016. Overall, 29 percent of 18- to 34-year-olds expect
the economy to improve during the next six months, compared with 21
percent of those ages 55-plus. While all age groups feel that these
improvements will boost their financial health, millennials are showing
solid optimism in this area. More than half (57 percent of 18- to
34-year-olds) expect their financial health will be better one year from
now, compared with 37 percent of 35- to 54-year-olds and 21 percent of
those ages 55-plus.

“It’s fantastic to see millennials so optimistic about the future, since
they struggled the most throughout the economic downturn,” adds Viamari.
“If these optimistic expectations come to fruition, it will go a long
way in encouraging younger consumers to open their wallets more. They
will be able to spend more on what they want, not just what they need.
And millennials will finally feel more comfortable about making those
impulse buys and even splurging now and again.”

IRI Point of View

To dig deeper into spending trends for holiday celebrations, IRI just
released a new Point of View, “Holiday 2015: Making a List and
Checking It Twice.” To download the free report, visit: http://www.iriworldwide.com/en-US/insights/Publications/Holiday-2015-Making-a-List-and-Checking-It-Twice.

About IRI’s MarketPulse Survey

IRI provides new survey results at the end of each calendar quarter
covering shoppers’ behaviors and attitudes as they directly relate to
their strategies for learning about, purchasing and utilizing CPG and
healthcare products, as well as information regarding perceptions of
economic conditions and their ability to provide for their families. For
complete MarketPulse coverage, visit: http://www.iriworldwide.com/en-US/insights/MarketPulse.
For more information about customizing the research for a particular
category or industry, please contact IRIMarketing@IRIworldwide.com.

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