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Canadian Grocer: Shoppers spending more on groceriesWednesday, June 10, 2015 > 10:31:05
Canadians are being more conservative in their spending, but not on food
Paying off debt is a big concern for Canadians, but they’re not letting it completely dictate their spending habits, according to a new report by research firm Mintel.
The Canadian Lifestyles 2015 report said consumer spending would continue to rise, reaching $1.084 trillion this year, and increasing by 4.7% over the next five years.
The category making the biggest gains is grocery. In a survey of 2,000 Canadians, 31% said they’ve spent more on in-home food in the past year, 56% said they’ve spent the same, and only 12% said they’ve spent less.
By comparison, 17% said they’ve spent more on dining out, 48% said they’ve spent the same, and 33% said they’ve spent less.
The grocery gains “tie into a focus on family, as well as health and eating better—[consumers] don’t necessarily want to be eating out all the time,” said Carol Wong-Li, senior lifestyle analyst at Mintel in Toronto.
Where Canadians are cutting back is on leisure, entertainment and recreation. “When families with bigger households participate in leisure activities, it’s expensive,” said Wong-Li. “So that’s the category that is going to be hit the hardest.”
In the survey, 32% percent of respondents said they’ve spent less on leisure/entertainment and 52% said they’ve spent the same; and 27% said they’ve spent less on vacations and 44% said they’ve spent the same.
Consumers are also cutting back on booze: 35% spent less on drinks outside the home, 37% spent the same, and just 7% spent more. In the home, 25% spent less on alcoholic drinks, 49% spent the same and 10% spent more.
Though consumers are a bit more conservative in their spending, Mintel said they’re still looking to treat themselves and are making “sensible splurges” a priority. When asked where they spend their “extra money” (once the bills are paid and the essentials have been purchased), 34% said they pay off debt, 31% said a long vacation (three or more days), 31% said dining out, 24% said small “extras” for family members, and 23% said a short vacation.
Where discretionary funds are spent largely depends on the consumer’s life-stage. Millennials are just as likely to put extra dollars towards paying off debt (32%) as they are dining out (34%). Middle-aged consumers, particularly those 35-44, plan for the future and are more likely to cite paying off debt as a priority than other age groups (45% vs 34% overall). Those 55+ are likely to be retired or planning for retirement, so they are more inclined to put extra money towards long vacations than average (39% vs 31% overall).
The survey also looked at the personal goals of Canadians. The top priorities are spending more time with family (58%), getting household finances in order (47%) and having a better work/life balance (44%). Asked about their health and wellness goals, 64% said they plan to exercise regularly, 59% said eat more fruits/vegetables, 49% said lose weight and 47% said get more sleep.
HOW BRANDS CAN CONNECT WITH CONSUMERS IN 2015
Canadians’ focus on paying off debt will continue to play into their spending choices. The key for brands and companies is to position offerings that are in line with making “responsible choices,” according to Mintel. Here are three ways to resonate with consumers this year:
- PROVIDE CONVENIENT WAYS TO ADD VALUE. “Getting a deal has become a fun and social pursuit, so companies can integrate technology, such as social platforms, where people are already going to look for discounts or flash sales,” said Wong-Li. “That will work well to engage millennials and parents who are easily looking to find discounts and deals.”
- MAKE REVIEWS MORE READILY AVAILABLE. Because consumers are increasingly scrutinizing their purchases, they want to know if they’re making the right purchase. “Companies can help make reviews and opinions more readily available or easily accessible,” said Wong-Li.
- FOCUS ON ‘YOU DESERVE IT’ MESSAGING, especially for eating out and vacation planning. “Eating out as a treat is the number-one reason why people eat out in the first place, so this [messaging] will tie in really well,” said Wong-Li.