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The Budget Shopper - US - June 2012

Popularized during the height of the recession, the term “budget shopper” referred to a consumer who was struggling to make ends meet by scrutinizing costs, weighing out the pros and cons of nearly every purchase, and making spending cutbacks wherever possible. Although the recession officially ended in 2009, consumer attitudes toward spending remain relatively unchanged, and nearly as many say that they adhere to a strict weekly or monthly budget. Further, compared to years past, a greater percentage of consumers say that they are “budgeting more compared with last year.” These sentiments confirm that consumers have retained the shopping habits and mindset cultivated during the economic downturn.

While in the past “buying on impulse” was not unusual, throughout the recession and the following difficult years, budget shopping has become the norm, regardless of household income—and is often equated with “smart shopping.” As a result, consumers are less willing to pay full price on nearly everything and have come to expect sales and discounts—which makes it more difficult for retailers to stand out in the sea of markdown offers.

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).

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

                      • Budget shopping indicators
                        • Coupon use holding steady, redemptions are up despite fewer available coupons
                          • Figure 1: Household use of cents-off coupons, January 2006-November 2011
                        • Spending patterns shift to accommodate rising costs and flat wages
                          • Figure 2: Average annual expenditures, by consumer unit, 2010
                        • Budget shopping drivers
                          • Economic pressures squeeze the middle class
                            • Figure 3: Share of households with annual income within 50% of the median, 1970-2010
                            • Figure 4: Median household income in inflation-adjusted dollars, 2000-10
                          • Retail channels
                            • Figure 5: Types of stores shopped in the last four weeks, January 2006-November 2011
                          • The consumer
                            • Share of respondents who are “budgeting more” increases
                              • Figure 6: Trended year-over-year budgeting trends, July 2008-February 2012
                            • Nearly all budget shopping behaviors have increased
                              • Figure 7: Strict budgeting and looking for savings, July 2010 vs. February 2012
                            • Conservative shopping strategies are the norm
                              • Figure 8: Types of budget-conscious shopping behavior, February 2012
                            • More consumers making efforts to find deals on food and household items
                              • Figure 9: Food and household items shopping budgeting behavior, July 2010 vs. February 2012
                            • Middle-aged women take a lesson from “extreme couponers” in their quest for deals
                              • Figure 10: Extreme couponing, by gender and women’s age groups, February 2012
                            • Most purchase private label over national brands at least sometimes
                              • Figure 11: Private label vs. national brand shopping behaviors, by those who purchase the item, February 2012
                            • Being a savvy shopper is a source of pride for many
                              • Figure 12: Proud of deals and tells friends and family, by gender and household income, February 2012
                            • What we think
                            • Issues in the Market

                                • Is budget shopping here to stay?
                                  • How can retailers stand out in a world where sales are expected?
                                    • What types of promotions convince consumers to stray from their shopping lists?
                                    • Insights and Opportunities

                                      • Shrinking middle class means trading down, looking for basics
                                        • Increasing household size, multigenerational living creates need for diverse products
                                          • Figure 13: Average household size in the U.S., 1930-2009
                                        • Mobile couponing may soon reach the masses—opportunities for all
                                        • Inspire Insights

                                            • Trend: Make it Mine
                                              • Trend: Let’s Make a Deal
                                              • Budget Shopping: Indicators

                                                • Key points
                                                  • Nearly three quarters of households use coupons
                                                    • Figure 14: Household use of cents-off coupons, January 2006-November 2011
                                                  • Though coupon use is steady, savings are up while distribution has declined
                                                    • Consumers increasingly turn to private label brands to save money
                                                      • Spending patterns shift to accommodate rising costs and flat wages
                                                          • Figure 15: Average annual expenditures, by consumer unit, 2006-10
                                                        • Personal savings falls, indicates effects of recession continue to be felt
                                                          • Figure 16: Personal savings nationwide, by quarter, 1952-Q1 2012
                                                        • Spending vs. saving: consumers still more likely to say they are spending less
                                                          • Figure 17: Spending more, less, or about the same compared to the past, April 2009-April 2012
                                                          • Figure 18: Share who are spending more/less and whether this is normal or temporary, April 2009-April 2012
                                                      • Budget Shopping—Drivers

                                                        • Key points
                                                          • The U.S. middle class has been steadily declining
                                                              • Figure 19: Share of households with annual income within 50% of the median, 1970-2010
                                                            • Median household income has fallen for the last three years
                                                              • Figure 20: Median household income in inflation-adjusted dollars, 2000-10
                                                            • Disposable personal income stagnated between 2009 and 2010
                                                              • Figure 21: Changes in disposable personal income, January 2007-March 2012
                                                            • Poverty rate rose to 15.1% in 2010—the highest level in 17 years
                                                              • Figure 22: Poverty rate in America, 1980-2010
                                                            • Rising costs put pressure on family budgets
                                                              • Single healthcare contributions increase 47% compared with 2006
                                                                • Figure 23: Average annual worker contributions to healthcare coverage premiums, by single and family, 2001-11
                                                              • Energy prices continue to march, causing cutbacks in other areas
                                                                • Figure 24: Fuel oil and gasoline average costs, All Items CPI, January 2007-April 2012
                                                              • Employment and labor participation rates remain low
                                                                • Figure 25: Unemployment and underemployment, January 2007-April 2012
                                                                • Figure 26: Labor force participation rate, January 2007-April 2012
                                                            • Store Types Shopped

                                                              • Key points
                                                                • Store types visited remains relatively steady over the past five years
                                                                  • Figure 27: Types of stores shopped in the last four weeks, January 2006-November 2011
                                                              • Innovations and Innovators

                                                                • Target a leader in mobile coupon innovation
                                                                  • New technology makes electronic coupons scannable at checkout
                                                                  • Year-Over-Year Budgeting Trends

                                                                    • Key points
                                                                      • “Budgeting more” increases compared with 2010, near recession level
                                                                        • Figure 28: Trended year-over-year budgeting trends, July 2008-February 2012
                                                                        • Figure 29: Year-over-year budgeting trends, by gender, age, and household income, February 2012
                                                                      • Reasons for budgeting more are relatively consistent from 2008-12
                                                                          • Figure 30: Trended year-over-year reasons for budgeting more, by total, July 2008-February 2012
                                                                        • Increasing costs—more so than reduced income—prompts budgeting
                                                                          • Figure 31: Reasons for budgeting more, February 2012
                                                                      • Strict Budgeting vs. Opportunistic Savings

                                                                        • Key points
                                                                          • Nearly all budget shopping behaviors increase from 2010
                                                                            • Figure 32: Strict budgeting and looking for savings, July 2008-February 2012
                                                                          • Strict household budgets most common among those budgeting more
                                                                            • Figure 33: Strict budgeting and looking for savings, by year-over-year budgeting trends, February 2012
                                                                          • Women are more inclined toward opportunistic cost savings
                                                                            • Figure 34: Strict budgeting and looking for savings, by gender, February 2012
                                                                          • Women put more effort into getting the best deals when shopping
                                                                            • Figure 35: Budget shopping behaviors, by gender, October 2010-November 2011
                                                                          • Strict budgeting falls off with age, opportunistic cost savings increases
                                                                            • Figure 36: Strict budgeting and looking for savings, by age, February 2012
                                                                          • Lower-income consumers more likely to be strict budgeters, less likely looking for savings
                                                                            • Figure 37: Strict budgeting and looking for savings, by household income, February 2012
                                                                            • Figure 38: Newspaper audience, by household income, 2011
                                                                        • Retail Channels Shopped and Shopping Behaviors

                                                                          • Key points
                                                                            • More shoppers visiting a variety of retail channels
                                                                              • Dollar stores on a growth trajectory
                                                                                • Figure 39: Retail channels shopped, July 2008-February 2012
                                                                              • Conservative shopping strategies adopted during the recession appear to have become habit
                                                                                • Sales and “percent-off” discounts are expected
                                                                                  • Figure 40: Types of budget-conscious shopping behavior, February 2012
                                                                                • Buying on sale, other savings strategies more common among women
                                                                                  • Figure 41: Types of budget-conscious shopping behavior, by gender, February 2012
                                                                                • Affluents more likely to exhibit budget shopping behaviors
                                                                                  • Figure 42: Types of budget-conscious shopping behavior, by household income, February 2012
                                                                              • Shopping Behaviors by Channel Shopped

                                                                                • Key points
                                                                                  • Across nearly every channel, shopping for sale items is top strategy
                                                                                    • Figure 43: Shopping behaviors, by retail channel shopped, February 2012
                                                                                  • Grocery shoppers engage in a variety of budget shopping behaviors
                                                                                    • Figure 44: Types of budget-conscious shopping behavior, by grocery store/supermarket shoppers, July 2009-February 2012
                                                                                  • Walmart shoppers are drawn to everyday low prices
                                                                                    • Figure 45: Types of budget-conscious shopping behavior, by Walmart shoppers, July 2009-February 2012
                                                                                  • Shoppers at mass merchandisers don’t always look for the cheapest
                                                                                    • Figure 46: Types of budget-conscious shopping behavior, by mass merchandiser shoppers, July 2009-February 2012
                                                                                  • Club store shoppers bulk up
                                                                                    • Figure 47: Types of budget-conscious shopping behavior, by club store shoppers, July 2009-February 2012
                                                                                  • Even at the high end, shoppers are looking for bargains
                                                                                    • Figure 48: Types of budget-conscious shopping behavior, by higher-end department store shoppers, July 2009-February 2012
                                                                                  • Value-priced department store shoppers embrace budgeting behaviors
                                                                                    • Figure 49: Types of budget-conscious shopping behavior, by value-priced department store shoppers, July 2009-February 2012
                                                                                  • Discount store shoppers are looking for the lowest prices
                                                                                    • Figure 50: Types of budget-conscious shopping behavior, by discount store shoppers, July 2009-February 2012
                                                                                • Shopping for Food and Household Items

                                                                                  • Key points
                                                                                    • More consumers making efforts to find deals on food and household items
                                                                                      • Figure 51: Types of budget-conscious shopping behavior, when shopping for food and household items, July 2010-February 2012
                                                                                    • Women more committed to budget shopping for food and household items
                                                                                      • Figure 52: Types of budget-conscious shopping behavior, when shopping for food and household items, by gender, February 2012
                                                                                    • “Extreme couponing” hits a chord among middle-aged women
                                                                                      • Figure 53: Extreme couponing, thoughts about purchase limits, and asking for rain checks, by gender and gender by age groups, February 2012
                                                                                    • Budget shopping for food and household items spans all income levels
                                                                                      • Figure 54: Types of budget-conscious shopping behavior, when shopping for food and household items, by household income, February 2012
                                                                                  • Private Label vs. National Brand Purchases

                                                                                    • Key points
                                                                                      • Most purchase private label over national brands at least sometimes
                                                                                          • Figure 55: Private label vs. national brand shopping behaviors, by those who purchase the item, February 2012
                                                                                        • Men are more apt than women to always/usually purchase store brand
                                                                                          • Figure 56: Private label vs. national brand shopping behaviors – Always/Usually buy, by gender, February 2012
                                                                                        • “Frugal fatigue” does not appear to have set in
                                                                                          • Figure 57: Ways consumers save on household purchases, by key demographics, February 2012
                                                                                      • Daily Deals and Facebook Friending for Discounts

                                                                                        • Key points
                                                                                          • Women more likely to use “daily deal” sites and Facebook for discounts
                                                                                            • Figure 58: Online daily deal site and Facebook discount use, by gender and gender by age groups, February 2012
                                                                                          • Affluents are most likely to have purchased a daily deal
                                                                                            • Figure 59: Online daily deal site and Facebook discount use, by household income, February 2012
                                                                                        • Budget Shopping Brings Satisfaction

                                                                                          • Key points
                                                                                            • Being a savvy shopper is a source of pride for many
                                                                                              • Figure 60: Proud of deals and tells friends and family, by key demographics, February 2012
                                                                                          • Impact of Race and Hispanic Origin

                                                                                            • Key points
                                                                                              • Year-over-year budgeting trends
                                                                                                  • Figure 61: Year-over-year budgeting trends, by race/Hispanic origin, February 2012
                                                                                                • Reasons for budgeting more
                                                                                                  • Figure 62: Reasons for budgeting more, by race/Hispanic origin, February 2012
                                                                                                • Strict budgeting vs. opportunistic savings
                                                                                                  • Figure 63: Strict budgeting and looking for savings, by race/Hispanic origin, February 2012
                                                                                                • Hispanics have larger households
                                                                                                  • Figure 64: Household size, by race/Hispanic origin of householder, 2010
                                                                                                • Median household income of Asians highest, Hispanics and blacks among the lowest
                                                                                                  • Figure 65: Median household income, by race and Hispanic origin of householder, 2010
                                                                                                • Budget shopping behaviors
                                                                                                  • Figure 66: Budget shopping behaviors, by race/Hispanic origin, October 2010-November 2011
                                                                                                • Retail channels shopped and shopping behaviors
                                                                                                  • Figure 67: Retail channels shopped, by race/Hispanic origin, February 2012
                                                                                                • Asians are motivated to get the best prices—not the cheapest products
                                                                                                  • Figure 68: Types of budget-conscious shopping behavior, by race/Hispanic origin, February 2012
                                                                                                • Shopping for food and household items
                                                                                                  • Figure 69: Food and household items shopping budgeting behavior, by race/Hispanic origin, February 2012
                                                                                                • Private label vs. national brand purchases
                                                                                                  • Figure 70: Private label vs. national brand shopping behaviors – always/usually buy, by race/Hispanic origin, February 2012
                                                                                                • Daily deals and Facebook friends for discounts
                                                                                                    • Figure 71: Online daily deal site and Facebook discount use, by race/Hispanic origin, February 2012
                                                                                                • Custom Consumer Groups—Parents

                                                                                                  • Key points
                                                                                                    • Year-over-year budgeting trends
                                                                                                      • Figure 72: Year-over-year budgeting trends, by gender and presence of children in household, February 2012
                                                                                                    • Reasons for budgeting more
                                                                                                        • Figure 73: Reasons for budgeting more, by gender and presence of children in household, February 2012
                                                                                                      • Strict budgeting vs. opportunistic savings
                                                                                                        • Figure 74: Strict budgeting and looking for savings, by gender and presence of children in household, February 2012
                                                                                                      • Shopping behavior
                                                                                                          • Figure 75: Types of budget-conscious shopping behavior, by gender and presence of children in household, February 2012
                                                                                                        • Shopping for food and household items
                                                                                                            • Figure 76: Food and household items shopping budgeting, by gender and presence of children in household, February 2012
                                                                                                          • Private label vs. national brand purchases
                                                                                                              • Figure 77: Private label vs. national brand shopping behaviors – always/usually buy, by gender and presence of children in household, February 2012
                                                                                                          • Appendix—Other Useful Consumer Tables

                                                                                                            • Year-over-year budgeting trends
                                                                                                              • Figure 78: Year-over-year budgeting trends, by generation, February 2012
                                                                                                            • Reasons for budgeting more
                                                                                                              • Figure 79: Reasons for budgeting more, by age and by race/Hispanic origin, February 2012
                                                                                                              • Figure 80: Reasons for budgeting more, by household income, February 2012
                                                                                                              • Figure 81: Reasons for budgeting more, by age, February 2012
                                                                                                              • Figure 82: Reasons for budgeting more, by urban area, February 2012
                                                                                                            • Strict budgeting vs. opportunistic savings
                                                                                                              • Figure 83: Strict budgeting and looking for savings, by reasons for budgeting more, February 2012
                                                                                                            • Retail channels shopped
                                                                                                              • Figure 84: Retail channels shopped, by gender, February 2012
                                                                                                              • Figure 85: Retail channels shopped, by household income, February 2012
                                                                                                              • Figure 86: Retail channels shopped, by generation, February 2012
                                                                                                              • Figure 87: Retail channels shopped, by year-over-year budgeting trends, February 2012
                                                                                                            • Shopping behaviors
                                                                                                              • Figure 88: Types of budget-conscious shopping behavior, by age, February 2012
                                                                                                            • Retail channels’ shopping behaviors
                                                                                                              • Grocery store/supermarkets
                                                                                                                • Figure 89: Grocery store/supermarket shopping behaviors, by gender, February 2012
                                                                                                                • Figure 90: Grocery store/supermarket shopping behaviors, by gender and presence of children in household, February 2012
                                                                                                              • Walmart
                                                                                                                • Figure 91: Types of budget-conscious shopping behavior, by Walmart shoppers, by gender, February 2012
                                                                                                              • Mass merchandisers
                                                                                                                • Figure 92: Types of budget-conscious shopping behavior, by mass merchandiser shoppers, by gender, February 2012
                                                                                                              • Club stores
                                                                                                                • Figure 93: Types of budget-conscious shopping behavior, by club store shoppers, by age, February 2012
                                                                                                              • Value-priced department stores
                                                                                                                • Figure 94: Types of budget-conscious shopping behavior, by value-priced department store shoppers, by household income, February 2012
                                                                                                              • Internet-only stores
                                                                                                                • Figure 95: Types of budget-conscious shopping behavior, by internet-only store shoppers, by age, February 2012
                                                                                                              • Shopping for food and household items
                                                                                                                • Figure 96: Food and household items shopping budgeting behavior, by year-over-year budgeting trends, February 2012
                                                                                                                • Figure 97: Food and household items shopping budgeting behavior, by age, February 2012
                                                                                                                • Figure 98: Extreme couponing, thoughts about purchase limits, and asking for rain checks, by age and household income, February 2012
                                                                                                                • Figure 99: Extreme couponing, thoughts about purchase limits, and asking for rain checks, by race/Hispanic origin February 2012
                                                                                                              • Private label vs. national brand purchases
                                                                                                                • Figure 100: Private label vs. national brand shopping behaviors, February 2012
                                                                                                                • Figure 101: Private label vs. national brand shopping behaviors – always/usually buy, by age, February 2012
                                                                                                                • Figure 102: Private label vs. national brand shopping behaviors – always/usually buy, by household income, February 2012
                                                                                                                • Figure 103: Private label vs. national brand shopping behaviors – always/usually buy, by urban area, February 2012
                                                                                                            • Appendix—Trade Associations

                                                                                                              Companies Covered

                                                                                                              • Amazon North America
                                                                                                              • Best Buy stores (USA)
                                                                                                              • BJ's Wholesale Club, Inc
                                                                                                              • Bureau of Economic Analysis
                                                                                                              • Burlington Coat Factory Warehouse Co.
                                                                                                              • Centers for Medicare & Medicaid Services
                                                                                                              • Circuit City (US)
                                                                                                              • Comcast Corporation
                                                                                                              • Consumer Electronics Association
                                                                                                              • Costco Wholesale Corporation
                                                                                                              • Dillard's, Inc
                                                                                                              • Facebook, Inc.
                                                                                                              • Family Dollar Stores, Inc
                                                                                                              • Food Marketing Institute
                                                                                                              • Gallup Organization, The
                                                                                                              • Gap (USA)
                                                                                                              • Grocery Manufacturers Association (GMA)
                                                                                                              • Groupon, Inc.
                                                                                                              • H.H. Gregg Appliances, Inc
                                                                                                              • Henry J. Kaiser Family Foundation
                                                                                                              • HJ Heinz Company
                                                                                                              • Integer Group (The)
                                                                                                              • J C Penney Company, Inc
                                                                                                              • Kmart Corporation
                                                                                                              • Kohl's Corporation
                                                                                                              • Macy's, Inc.
                                                                                                              • Missoni S.p.A
                                                                                                              • National Association of Chain Drug Stores (NACDS)
                                                                                                              • National Council of Chain Restaurants (NCCR)
                                                                                                              • National Retail Federation (NRF)
                                                                                                              • Newspaper Association of America
                                                                                                              • Nintendo of America Inc.
                                                                                                              • Nordstrom
                                                                                                              • Overstock.com Inc.
                                                                                                              • Private Label Manufacturers Association (PLMA)
                                                                                                              • Procter & Gamble Company (The)
                                                                                                              • Procter & Gamble USA
                                                                                                              • PUMA AG Rudolf Dassler Sport
                                                                                                              • SAM's Club
                                                                                                              • Sears Holdings Corporation
                                                                                                              • Starbucks Corporation
                                                                                                              • Target Corporation
                                                                                                              • U.S. Bureau of Labor Statistics
                                                                                                              • U.S. Bureau of the Census
                                                                                                              • U.S. Department of Agriculture
                                                                                                              • US Department of Commerce
                                                                                                              • Walmart Stores (USA)
                                                                                                              • Walt Disney Company, The

                                                                                                              The Budget Shopper - US - June 2012

                                                                                                              £3,277.28 (Excl.Tax)