Consumers more sensitive to rising prices and shrinking portion sizes
Monday 09 May 2011
Rising gas prices in the US are being blamed for more expensive groceries, smaller restaurant portions and a hike in restaurant prices, says a new report released Monday.
And that translates to a reduced splurge on premium ice creams, nights dining out, and an increased reliance on coupons and deals, says market research consultant Technomic.
The results are telling, says Bob Goldin, executive vice-president, noting that consumers have become more sensitive to portion sizes and value for money.
Their survey, for instance, found that 84 percent of the 1,000 consumers polled in April believe that grocery prices have risen in the past three months, while 62 percent believe that restaurant prices have also risen.
For many US consumers, the rising cost of food isn't in their imagination. Both Kraft Foods and Sara Lee hiked prices and McDonald's warned of a small price increase on their menu items as well. These increases have largely been blamed to rising commodity costs.
Rising gas prices related to transportation and shipping are also being passed on to the consumer.
About half of consumers polled remarked that packaged food sizes have gotten smaller, while 32 percent said the same is true of restaurant portions.
That's because companies have already begun shrinking food packages in the last few years in response to rising manufacturing costs. Kellogg's, for instance, reduced their cereal boxes by about 15 percent and raised prices by four percent this year.
Tropicana orange juice also shrunk by eight percent due to rising gas and shipping costs, and Heinz ketchup bottles were also downsized.
Meanwhile, if restaurants have started to shave portion sizes in a bid to help their bottom line, Goldin warns that consumers are on to them and have become acutely sensitive to how much food-bang they're getting for their buck.
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