Chain Store Age - July 2009

Study Points to Changing Profile of U.S. Consumers

While the economic downturn has retailers and other mar- keters working overtime to appeal to frugal-minded consumers, it’s just the beginning of changes to come, according to new projections from The Nielsen Co. Its research shows that significant demographic and economic shifts during the next

10-plus years will have a dramatic impact on the shopping landscape and product category growth, as consumers grow older, more multi-cultural and less well-off.

“The demographic shifts under way create both challenges and opportunities, and companies that anticipate the shifts could have a competitive advantage,” said Doug Anderson, senior VP global research and development, Nielsen Co.

Companies catering to older consumers and providing goods and services to make them comfortable, such as medications or vitamins, will be positioned to do well, according to Anderson, but companies exclusively focused on the youth market will see their ability to grow limited by slow overall market growth.

“As our society grows older, American culture will move from being based on the interests and tastes of young people to being defined by the growing population of older people,” Anderson said.

Nielsen noted that while traditional households with children are on the decline, ethnic families are expected to grow

at a faster rate than the total population. According to Nielsen, more than half of families with children are expected to be multi-cultural by 2025.

“While some companies have multi-cultural initiatives in place today, by 2020, multi-cultural marketing will be a necessity — rather than an option — for doing business,” Anderson added.

On the income front, Nielsen said household incomes are expected to stagnate or fall slightly during the next 10 years. It predicted household spending would grow at a very slow pace, especially compared with the previous 10 years. Nielsen data show the lowest-income population segments growing the fastest, with affluent and wealthy segments declining.

Growth Categories Declining Categories

• Ethnic health and beauty products • Toys and sporting goods

• Medications/Remedies • Breakfast foods

• Health aids • Baby care — diapers, food, etc.

• Vitamins • Pet products

• Flour/Shortening/Sugar/Yeast/Eggs

Source: The Nielsen Co.

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