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The Budget Shopper - US - December 2014

“Coupons are still an effective way of appealing to budget shoppers. Not only do they provide tangible value, but they can sway consumers to try products or stores they may not have otherwise considered Retailers should strive to make it easy and even fun for customers to use coupons, tailor them as much as possible to customers’ individual tastes, and reward them for telling others about savings they accrued.”
– Diana Smith, Senior Research & Apparel Analyst

Some questions answered in this report include:

  • What is the latest consumer sentiment regarding personal finances and the economy at large?
  • Who are budget shoppers?
  • Where do budget shoppers get their information?

For the first time since the recession, several positive macroeconomic factors are beginning to emerge such as higher consumer confidence, decreasing unemployment and poverty rates, and consumer spending on the rise. The US population is growing and greying, with Baby Boomers getting older and comprising more of the population as well as Hispanics who will comprise nearly 20% over the next few years. This is notable given that all minorities, and especially Hispanics, exhibit multiple budget shopping actions and are more likely to be extreme in their saving and shopping behaviors.

These positive indicators are not - and will not - translate into exponentially different or frivolous spending patterns, as consumers remain cautious and conservative, ready to prepare for the worst, should the worst reappear or manifest itself in a different way. Coupons are still used by more than half of shoppers, consumers are still deferring mid- to high-ticket purchases for a “little while longer,” and saving the exceptions for little splurges that involve things like an escape, relaxation, an indulgence, or family bonding time. Budget shoppers will actively research, seek out bargains, invest a lot of time in the process, and even go out of their way to ensure they stay within their means. For this reason, they should be relatively easy to find and reach; the challenge for retailers will be managing how to meet their customers’ demands for low price while still being mindful of the bottom line and their own financial state.

This report builds on the analysis presented in Mintel’s The Budget Shopper – US, June 2012 report.

This report explores the shopping behavior and attitudes of budget shoppers. In particular the report tracks how budget shoppers’ shopping behaviors have changed from the peak of the recession (2008-09), immediately following the recession (2010), to recovery (2012) to today (2014). 

For the purposes of this report, the term “budget shopper” refers to the degree to which consumers across a range of demographics/income groups assess the budgetary impact of their shopping and spending habits by weighing sales incentives and cost-savings behaviors against where they choose to shop and what they choose to purchase.

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Consumer survey data
            • Consumer Expenditure Survey
              • Abbreviations and terms
                • Abbreviations
                  • Terms
                  • Executive Summary

                    • Overview
                      • The market
                        • Figure 1: Financial outlook: present vs. last 12 months, April 2008-June 2014
                        • Figure 2: Financial outlook on American economy in coming 12 months, April 2008-June 2014
                      • Market drivers
                        • US population is growing, particularly among Hispanics
                          • Figure 3: Population by Hispanic origin, 2009-19
                        • Poverty rate down for first time since 2006
                          • Figure 4: Number of people in the US living in poverty, and annual percent change, 2003-13
                        • Higher consumer confidence may lead to increased discretionary spending
                          • Figure 5: Consumer confidence and unemployment, 2000-14
                        • Consumer expenditures are up about 2% since recession
                          • Figure 6: Average annual expenditures and characteristics of all consumer units, 2006-12
                        • The consumer
                          • No one size fits all type of budget shoppers
                            • Figure 7: Budget shopper spectrum based on economic outlook segmentation, April 2013-June 2014
                          • Nearly all consumers budgeting same or more than last year
                            • Figure 8: Budgeting habits, September 2014
                          • Increased budgeting namely attributed to higher overall expenses
                            • Figure 9: Reasons for budgeting more, September 2014
                          • Heaviest budget shoppers are extreme in their budget-oriented actions
                            • Figure 10: Budget-minded actions taken, by repertoire of types of budget shopper, September 2014
                          • Those in large households are significantly heavier shoppers
                            • Figure 11: Stores shopped for household or personal items, by household size, September 2014
                          • National brands still preferred over store brands
                            • Figure 12: Items purchased as store brand vs. national brand, September 2014
                          • What we think
                          • Issues and Insights

                              • What is the latest consumer sentiment regarding personal finances and the economy at large?
                                • The issues
                                  • The implications
                                    • Who are budget shoppers?
                                      • The issues
                                        • The implications
                                          • Where do budget shoppers get their information?
                                            • The issues
                                              • The implications
                                              • Trend Application

                                                  • Trend: Prepare for the Worst
                                                    • Trend: Let’s Make a Deal
                                                      • Trend: The Nouveau Poor
                                                      • Market Drivers

                                                        • Key points
                                                          • Total US households at an all-time high, yet size of households decline
                                                            • Figure 13: US Households, 2002-12
                                                            • Figure 14: Average household size, by race of householder, 2002-12
                                                          • US population is growing and greying
                                                            • Figure 15: Population by age, 2009-19
                                                          • Hispanics will comprise nearly 19% of total US population by 2019
                                                            • Figure 16: Population by Hispanic origin, 2009-19
                                                          • Gross domestic product peaks for first time in several years; Disposable personal income also up
                                                            • Figure 17: Real Gross Domestic Product and Related Measures: Percent Change from Preceding Period
                                                            • Figure 18: Real Disposable Personal Income: Percent Change from Preceding Periods
                                                          • Hispanics and Blacks have lowest household income
                                                            • Figure 19: Household Income Distribution, By Race/ethnicity, 2012
                                                          • Higher consumer confidence may lead to increased discretionary spending
                                                            • Figure 20: Consumer confidence and unemployment, 2000-14
                                                          • Poverty rate down for first time since 2006
                                                            • Figure 21: Number of people in the US living in poverty, and annual percent change, 2003-13
                                                          • Consumer expenditures are up about 2% since recession
                                                            • Figure 22: Average annual expenditures and characteristics of all consumer units, 2006-12
                                                            • Figure 23: Average annual expenditures and characteristics of all consumer units, Percent change vs. prior periods, 2006-2012
                                                        • Target Segmentation

                                                            • Who are budget shoppers?
                                                              • Consumer segmentation
                                                                • Figure 24: Budget shopper spectrum based on economic outlook segmentation, April 2013-June 2014
                                                                • Figure 25: Economic outlook segmentation, Percentage by segment, April 2013-June 2014
                                                              • Facing Challenges (FC)
                                                                • Financial Nesters (FN)
                                                                  • Economically Indifferent (EI)
                                                                    • Fiscally Fit (FF)
                                                                      • Confident Spenders (CS)
                                                                        • Attitudes and opinions
                                                                          • Shopping
                                                                            • Food
                                                                              • Apparel
                                                                                • General
                                                                                  • How to reach them
                                                                                    • Online
                                                                                      • Figure 26: Budgeting habits: budgeting money more vs. last year, by visits websites daily, September 2014
                                                                                    • Social media
                                                                                        • Figure 27: Budgeting habits: budgeting money more vs. last year, by visits social media websites daily, September 2014
                                                                                      • Broad-based media
                                                                                        • Out-of-Home
                                                                                          • In-store
                                                                                            • What do consumers want?
                                                                                            • Financial Outlook

                                                                                              • Key points
                                                                                                • More people than ever think their financial stance has improved recently
                                                                                                  • Figure 28: Financial outlook: present vs. last 12 months, April 2008-June 2014
                                                                                                • Three out of four think the economy will remain stagnant or reverse
                                                                                                  • Figure 29: Financial outlook on American economy in coming 12 months, April 2008-June 2014
                                                                                                • People are more positive about personal finances vs. economy at large
                                                                                                  • Figure 30: Financial outlook: present vs. future 12 months vs. financial outlook on American economy in coming 12 months, April 2013-June 2014
                                                                                                • Younger people are more upbeat
                                                                                                  • Figure 31: Financial outlook, Percent who think things are/will be better off, by age, April 2013-June 2014
                                                                                                • A positive financial outlook doesn’t necessarily equate to loosening of budgeting tendencies
                                                                                                  • Figure 32: Financial outlook on American economy in coming 12 months vs. Attitudes and opinions about Shopping, Based on index vs. all respondents, April 2013-June 2014
                                                                                                  • Figure 33: Likelihood to purchase big-ticket or medium-ticket item in next 30 days, April 2013-June 2014
                                                                                              • Budgeting Tendency vs. Prior Year

                                                                                                • Key points
                                                                                                  • Nearly nine out of 10 consumers budgeting same or more than last year
                                                                                                    • Figure 21: Budgeting habits, September 2014
                                                                                                  • Adults 18-34 are saving the most…and the least
                                                                                                    • Figure 34: Budgeting habits, by age, September 2014
                                                                                                  • Those with income less than $100K plan to save more this year
                                                                                                    • Figure 35: Budgeting habits, by household income, September 2014
                                                                                                  • Larger households necessitate tighter budgets
                                                                                                    • Figure 36: Budgeting habits – budgeting more, by household size and presence of children in household, September 2014
                                                                                                  • Reasons for budgeting more money vs. last year
                                                                                                    • Higher expenses are main reason for budgeting more money
                                                                                                      • Figure 37: Reasons for budgeting more, September 2014
                                                                                                    • Significant life events impact budgeting behavior
                                                                                                    • Budgeting Shopping Actions

                                                                                                      • Key points
                                                                                                        • More than half of consumers use coupons, although overall usage is slightly dipping
                                                                                                          • Figure 38: Budget-minded actions taken, September 2014
                                                                                                          • Figure 39: Coupon usage, August 2008-September 2014
                                                                                                        • Verbatims about coupon usage
                                                                                                          • Millennials and Generation X more likely to maintain strict budgeting parameters
                                                                                                            • Figure 40: Budget-minded actions taken, by age, September 2014
                                                                                                          • The affluent still actively shop for deals
                                                                                                            • Figure 41: Budget-minded actions taken, by household income, September 2014
                                                                                                          • Presence of children leads to more budget-minded actions
                                                                                                            • Figure 42: Budget-minded actions taken, by presence of children in household, September 2014
                                                                                                          • Females, Millennials, and Boomers maintain lowest budgets
                                                                                                            • Figure 43: Budget-minded actions taken, by various demographics (mean), September 2014
                                                                                                          • Heaviest budget shoppers are extreme in their budget-oriented actions
                                                                                                            • Figure 44: Budget-minded actions taken, by repertoire of types of budget shopper, September 2014
                                                                                                          • Heaviest budget shoppers overindex on saving due to issues related to mortgages, childcare, and big-ticket items
                                                                                                              • Figure 45: Reasons for budgeting more, by repertoire of types of budget shopper, September 2014
                                                                                                          • Type of Stores Shopped

                                                                                                            • Key points
                                                                                                              • Walmart and grocery stores most shopped for household or personal items
                                                                                                                • Figure 46: Stores shopped for household or personal items, September 2014
                                                                                                              • Boomers shop more often at value-oriented retailers
                                                                                                                  • Figure 47: Stores shopped for household or personal items, by gender and age, September 2014
                                                                                                                • People in large households are significantly heavier shoppers
                                                                                                                  • Figure 48: Stores shopped for household or personal items, by household size, September 2014
                                                                                                                • Heavy budget shoppers significantly more likely to frequent many stores
                                                                                                                  • Figure 49: Stores shopped for household or personal items, by repertoire of types of budget shopper, September 2014
                                                                                                              • Shopping Behaviors

                                                                                                                • Key points
                                                                                                                  • Half of people look at the sale items first before entertaining non-sale items
                                                                                                                    • Figure 50: Attitudes towards shopping, September 2014
                                                                                                                  • Attitudes toward shopping
                                                                                                                    • Agreement increases as level of budget shopping rises
                                                                                                                      • Figure 51: Attitudes towards shopping, by repertoire of types of budget shopper, September 2014
                                                                                                                    • Qualitative insight
                                                                                                                    • Brand Preferences

                                                                                                                      • Key points
                                                                                                                        • Most consumers prefer national brands over store brands
                                                                                                                          • Figure 52: Items purchased as store brand vs. national brand, September 2014
                                                                                                                        • Young men most likely to prefer store brands
                                                                                                                          • Figure 53: Items purchased as store brand vs. national brand – Strong store brand preference, by gender and age, September 2014
                                                                                                                          • Figure 54: Items purchased as store brand vs. national brand – Strong store brand preference, by household income, September 2014
                                                                                                                        • Avid store brand shoppers frequent mass merchandisers and warehouse clubs
                                                                                                                          • Figure 55: Stores shopped for household or personal items, by repertoire of types of only store brands, September 2014
                                                                                                                      • Race and Hispanic Origin

                                                                                                                        • Key points
                                                                                                                          • Blacks are the most positive about current and future financial situation
                                                                                                                            • Figure 56: Financial outlook: present vs. last 12 months, by race/Hispanic origin, April 2013-June 2014
                                                                                                                            • Figure 57: Financial outlook: present vs. future 12 months, by race/Hispanic origin, April 2013-June 2014
                                                                                                                          • Blacks and Asians feel most optimistic about US economy
                                                                                                                            • Figure 58: Financial outlook on American economy in coming 12 months, by race/Hispanic origin, April 2013-June 2014
                                                                                                                          • Blacks and Hispanics budgeting more than last year
                                                                                                                            • Figure 59: Budgeting habits, by race/Hispanic origin, September 2014
                                                                                                                          • Higher expenses are the main reason for stricter budgets
                                                                                                                            • Figure 60: Reasons for budgeting more, by race/Hispanic origin, September 2014
                                                                                                                          • Whites use coupons the most
                                                                                                                            • Figure 61: Budget-minded actions taken, by race/Hispanic origin, September 2014
                                                                                                                          • Hispanics and Blacks most likely to shop for household and/or personal items at Walmart
                                                                                                                            • Figure 62: Stores shopped for household or personal items, by race/Hispanic origin, September 2014
                                                                                                                          • Asians are engaged in the deal-finding process
                                                                                                                            • Figure 63: Attitudes towards shopping, by race/Hispanic origin, September 2014
                                                                                                                          • Hispanics and Blacks strongly prefer store brands
                                                                                                                            • Asians represent opportunity target for private label brands
                                                                                                                              • Figure 65: Items purchased as store brand vs. national brand – Light store brand preferences, by race/Hispanic origin, September 2014
                                                                                                                          • Appendix – Other Useful Consumer Tables

                                                                                                                              • Figure 66: Household income distribution by race and Hispanic origin of householder, 2012
                                                                                                                            • Consumer spending data
                                                                                                                              • Figure 67: Average annual expenditures and characteristics of all consumer units, 2006-12
                                                                                                                              • Figure 68: Average annual expenditures and characteristics of all consumer units, Percent by category, 2006-12
                                                                                                                            • Financial outlook: Present vs. past 12 months
                                                                                                                              • Figure 69: Financial outlook: present vs. last 12 months, by household income, April 2013-June 2014
                                                                                                                            • Financial outlook: Present vs. future 12 months
                                                                                                                              • Figure 70: Financial outlook: present vs. future 12 months, by household income, April 2013-June 2014
                                                                                                                            • Budgeting habits
                                                                                                                              • Figure 71: Budgeting habits, by employment, September 2014
                                                                                                                              • Figure 72: Budgeting habits, by area, September 2014
                                                                                                                            • Reasons for budgeting money more vs. last year
                                                                                                                              • Figure 73: Reasons for budgeting more, by gender, September 2014
                                                                                                                              • Figure 74: Reasons for budgeting more, by presence of children in household, September 2014
                                                                                                                              • Figure 75: Reasons for budgeting more, by repertoire of types of budget shopper, September 2014
                                                                                                                            • Budget shopping actions
                                                                                                                              • Figure 76: Budget-minded actions taken, by household size, September 2014
                                                                                                                              • Figure 77: Budget-minded actions taken, by visits websites daily, part 1, September 2014
                                                                                                                              • Figure 78: Budget-minded actions taken, by visits websites daily, part 2, September 2014
                                                                                                                              • Figure 79: Budget-minded actions taken, by visits social media websites daily, part 1, September 2014
                                                                                                                              • Figure 80: Budget-minded actions taken, by visits social media websites daily, part 2, September 2014
                                                                                                                              • Figure 81: Budget-minded actions taken, by budgeting habits, September 2014
                                                                                                                            • Type of stores shopped
                                                                                                                              • Figure 82: Stores shopped for household or personal items, by household income, September 2014
                                                                                                                              • Figure 83: Stores shopped for household or personal items, by presence of children in household, September 2014
                                                                                                                              • Figure 84: Stores shopped for household or personal items, by repertoire of types of budget shopper, September 2014
                                                                                                                              • Figure 85: Stores shopped for household or personal items, by budgeting habits, September 2014
                                                                                                                            • Shopping attitudes
                                                                                                                              • Figure 86: Attitudes towards shopping, by gender and age, September 2014
                                                                                                                              • Figure 87: Attitudes towards shopping, by household income, September 2014
                                                                                                                              • Figure 88: Attitudes towards shopping, by household size, September 2014
                                                                                                                              • Figure 89: Attitudes towards shopping, by presence of children in household, September 2014
                                                                                                                            • Brand preferences – strong store preference (always or usually buy store brands)
                                                                                                                              • Figure 90: Items purchased as store brand vs. national brand – Strong store brand preference, by household size, September 2014
                                                                                                                              • Figure 91: Items purchased as store brand vs. national brand – Strong store brand preference, by presence of children in household, September 2014
                                                                                                                            • Brand preferences – never buy store brand
                                                                                                                              • Figure 92: Items purchased as store brand vs. national brand – Never, by gender and age, September 2014
                                                                                                                              • Figure 93: Items purchased as store brand vs. national brand – Never, by household income, September 2014
                                                                                                                              • Figure 94: Items purchased as store brand vs. national brand – Never, by race/Hispanic origin, September 2014
                                                                                                                            • Brand preferences – Always buy store brand
                                                                                                                              • Figure 95: Items purchased as store brand vs. national brand – Always, by gender and age, September 2014
                                                                                                                              • Figure 96: Items purchased as store brand vs. national brand – Always, by household income, September 2014
                                                                                                                              • Figure 97: Items purchased as store brand vs. national brand – Always, by race/Hispanic origin, September 2014
                                                                                                                              • Figure 98: Items purchased as store brand vs. national brand – Always, by repertoire of types of budget shopper, September 2014
                                                                                                                            • Brand preferences – Light store brand preference (sometimes or rarely buy store brands)
                                                                                                                              • Figure 99: Items purchased as store brand vs. national brand – Light store brand preferences, by gender, September 2014
                                                                                                                              • Figure 100: Items purchased as store brand vs. national brand – Light store brand preferences, by age, September 2014
                                                                                                                              • Figure 101: Items purchased as store brand vs. national brand – Light store brand preferences, by household size, September 2014
                                                                                                                              • Figure 102: Items purchased as store brand vs. national brand – Light store brand preferences, by presence of children in household, September 2014
                                                                                                                              • Figure 103: Items purchased as store brand vs. national brand – Light store brand preferences, by repertoire of types of budget shopper, September 2014
                                                                                                                            • Budget shopper repertoire analysis demographics
                                                                                                                              • Figure 104: Repertoire of types of Budget Shopper, by demographics
                                                                                                                          • Appendix – Economic Outlook Segmentation

                                                                                                                            • Demographics
                                                                                                                              • Figure 105: Economic outlook segmentation, by gender, April 2013-June 2014
                                                                                                                              • Figure 106: Economic outlook segmentation, by age, April 2013-June 2014
                                                                                                                              • Figure 107: Economic outlook segmentation, by race/Hispanic origin, April 2013-June 2014
                                                                                                                              • Figure 108: Economic outlook segmentation, by gender, April 2013-June 2014
                                                                                                                            • Financial outlook
                                                                                                                              • Figure 109: Financial outlook: present vs. last 12 months, by economic outlook segmentation, April 2013-June 2014
                                                                                                                              • Figure 110: Financial outlook: present vs. future 12 months, by economic outlook segmentation, April 2013-June 2014
                                                                                                                              • Figure 111: Financial outlook on American economy in coming 12 months, by economic outlook segmentation, April 2013-June 2014
                                                                                                                              • Figure 112: Likelihood to purchase big-ticket item in next 30 days, by economic outlook segmentation, April 2013-June 2014
                                                                                                                              • Figure 113: Likelihood to purchase medium-ticket item in next 30 days, by economic outlook segmentation, April 2013-June 2014
                                                                                                                            • Life events experienced and/or expected
                                                                                                                              • Figure 114: Life events experienced and/or expected in last 12 months or next 12 months, by economic outlook segmentation, April 2013-June 2014
                                                                                                                            • Attitudes and opinions about shopping/food/apparel
                                                                                                                              • Figure 115: Attitudes and opinions about shopping, by economic outlook segmentation, April 2013-June 2014
                                                                                                                              • Figure 116: Attitudes and opinions about food, by economic outlook segmentation, April 2013-June 2014
                                                                                                                              • Figure 117: Attitudes and opinions about apparel, by economic outlook segmentation, April 2013-June 2014
                                                                                                                              • Figure 118: General attitudes, opinions, and interests, by economic outlook segmentation, April 2013-June 2014
                                                                                                                            • Media consumption
                                                                                                                              • Figure 119: General attitudes, opinions, and interests, by economic outlook segmentation, April 2013-June 2014
                                                                                                                              • Figure 120: Advertising outside the home noticed in last 30 days, by economic outlook segmentation, April 2013-June 2014
                                                                                                                              • Figure 122: Social media website visitation, by economic outlook segmentation, April 2013-June 2014
                                                                                                                              • Figure 123: Attitudes and opinions about social media, by economic outlook segmentation, April 2013-June 2014
                                                                                                                          • Appendix – Trade Associations

                                                                                                                              • Food Marketing Institute (FMI)
                                                                                                                                • Grocery Manufacturers Association (GMA)
                                                                                                                                  • National Association of Chain Drug Stores (NACDS)
                                                                                                                                    • National Retail Federation (NRF)

                                                                                                                                    Companies Covered

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                                                                                                                                    The Budget Shopper - US - December 2014

                                                                                                                                    £3,277.28 (Excl.Tax)