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US The Budget Shopper Market Report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the The Budget Shopper market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Definition

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 (2012-14) and today (2017).

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.

This Report builds on the analysis presented in Mintel’s The Budget Shopper – US, December 2015, December 2014 and June 2012 as well as the Budget Shopper – US, October 2010, October 2009 and October 2008 Reports.

Expert analysis from a specialist in the field

Written by Alexis DeSalva, a leading analyst in the Retail & Apparel sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The majority of consumers practice budgeting, in some form, with some doing so out of necessity and others doing so as a way to save and plan ahead. Budget shoppers are highly motivated by price, and will put in the work to score a deal and find the best prices. They’re willing to shop around across multiple retailers and brands, making it a challenge to build loyalty; however, there’s an opportunity for retailers to unlock the potential of store brands and offer new ways to help consumers stay on track with their spending without resorting to constant promotions. Alexis DeSalva
Retail & Apparel Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Fierce competition is challenging value-focused retailers
            • Figure 1: Retailers shopped, August 2017
          • Budget shoppers are more focused on price, less on brand loyalty
            • Figure 2: Influence on shopping, August 2017
          • The opportunities
            • Unlocking store or generic brands
              • Figure 3: Budgeting actions, August 2017
            • Appealing to all types of budget shoppers
              • Figure 4: Budgeting behaviors, by age and household income, August 2017
            • What it means
            • The Market – What You Need to Know

              • Financial situations could impact consumers’ need to budget
                • Planning ahead
                • Market Factors

                  • Optimistic market factors could impact consumers’ willingness to spend
                    • Figure 5: Consumer Sentiment Index, January 2007-September 2017
                  • The election has made some rethink their finances
                    • Figure 6: Election impact on household income and cost of living, by select demographics, May 2017
                  • Diverse households lead to diverse shopping needs
                    • Figure 7: Number of households, by race and Hispanic origin of householder, 2006 and 2016
                  • Preparing for the unknown
                  • Key Players – What You Need to Know

                    • Budget shoppers are frequenting mass and grocery
                      • Value-focused retailers feel the pressure of rising competition
                        • A shift away from name brands
                        • What’s Working?

                          • Changes at mass and grocery are capturing the attention of budget shoppers
                            • Figure 8: Retailers shopped, August 2017
                            • Figure 9: Walmart email campaign, August 2017
                            • Figure 10: Amazon email campaign, September 2017
                        • What’s Struggling?

                          • Value-oriented channels are losing budget shoppers to competitors
                            • Figure 11: Retailers shopped, August 2017
                        • What’s Next?

                          • New competition arises from current players
                            • Figure 12: Target email campaign, September 2017
                          • An emergence of affordable, nameless brands could threaten some current store brands
                            • Figure 13: Influence on shopping, by age, August 2017
                          • Publicizing assortment, not price, at value-oriented retailers
                            • Helping budget shoppers narrow down their options
                            • The Consumer – What You Need to Know

                              • Most consumers are budgeting more or the same
                                • Budget shoppers enjoy deal-seeking and are planning for the future
                                  • Mass and grocery are preferred by budget shoppers
                                    • Experiences are worth splurging on
                                    • Budgeting Behaviors

                                      • Budgeting means different things, to different people
                                        • Few consumers rarely budget
                                          • Figure 14: Budgeting behaviors, August 2017
                                        • Younger consumers are more budget conscious, regardless of income
                                          • Figure 15: Budgeting behaviors, by age and household income, August 2017
                                        • Retirees and older consumers not tied to a budget
                                          • Figure 16: Budgeting behaviors by select demographics, August 2017
                                        • Blacks and Hispanics are more likely to budget
                                          • Figure 17: Budgeting behaviors, by race and Hispanic origin, August 2017
                                      • Reasons for Budgeting

                                        • Most consumers enjoy the thrill of deal-seeking
                                          • Figure 18: Reasons for budgeting, August 2017
                                        • Long-term planning and debt reduction key budget drivers
                                          • Figure 19: Reasons for budgeting, by gender, August 2017
                                          • Figure 20: Reasons for budgeting, by gender and current marital status, August 2017
                                        • Older consumers enjoy the hunt for deals
                                          • Figure 21: Reasons for budgeting, by age, August 2017
                                        • Blacks and Asians are saving, but for different reasons
                                          • Figure 22: Reasons for budgeting, by race and Hispanic origin, August 2017
                                        • In their own words
                                        • Retailers Shopped

                                          • Budget shoppers prefer mainstream channels and Amazon
                                            • Figure 23: Retailers shopped, August 2017
                                          • Older shoppers stay true to routine and shop grocery
                                            • Figure 24: Select retailers shopped, by age, August 2017
                                          • Lower-income consumers seek value at mass merchandisers, while higher-income ones prefer Amazon
                                            • Figure 25: Retailers shopped, by household income, August 2017
                                          • Heavy budgeters shopping value-oriented retailers
                                            • Figure 26: Retailers shopped, by age, August 2017
                                          • Blacks and Hispanics seek value, while Asians aren’t deterred by membership fees
                                            • Figure 27: Retailers shopped, by race and Hispanic origin, August 2017
                                          • Budget shoppers describe their favorite stores
                                          • Budgeting Actions

                                            • Store brands, discounts, and low-priced items capture most budget shoppers’ interest
                                              • Figure 28: Budgeting actions, August 2017
                                            • Younger adults frequently shop discounted items and store brands
                                              • Figure 29: Budgeting actions, by age, August 2017
                                            • Coupon use spans generations
                                              • Figure 30: Budgeting actions, by generation, August 2017
                                            • Hispanics regularly practice more budgeting actions
                                              • Figure 31: Budgeting actions, by race and Hispanic origin, August 2017
                                          • Influence on Shopping

                                            • Many budgeters are willing to take a risk or shop around for the best prices
                                              • Figure 32: Influence on shopping, August 2017
                                            • Younger budget shoppers are less loyal to brands
                                              • Figure 33: Influence on shopping, by age, August 2017
                                            • Parents are willing to wait for the right prices
                                              • Figure 34: Influence on shopping, by select demographics, August 2017
                                            • Asian non-Hispanics are strategic with their shopping
                                              • Figure 35: Influences on shopping, by Asians, August 2017
                                          • Splurges

                                            • Most consumers willing to splurge on entertainment, experiences and clothes
                                              • Figure 36: Splurges, August 2017
                                            • Those with higher incomes prefer splurging on experiences
                                              • Figure 37: Splurges, by age and household income, August 2017
                                            • Young men splurge on fitness
                                              • Figure 38: Splurges, by select demographics, August 2017
                                            • Whites value splurging on experiences, while Blacks splurge on fashion
                                              • Figure 39: Splurges, by race and Hispanic origin, August 2017
                                          • Appendix – Data Sources and Abbreviations

                                            • Data sources
                                              • Consumer survey data
                                                • Consumer qualitative research
                                                  • Direct marketing creative
                                                    • Abbreviations
                                                    • Appendix – The Market

                                                        • Figure 40: Population by race and Hispanic origin, 2012-22
                                                        • Figure 41: Households, by type, 2016
                                                    • Appendix – The Consumer

                                                        • Figure 42: Retailers shopped, dollar stores – CHAID – Tree output, August 2017
                                                        • Figure 43: Retailers shopped, grocery stores – CHAID – Tree output, August 2017
                                                        • Figure 44: Retailers shopped, mass merchandisers – CHAID – Tree output, August 2017
                                                        • Figure 45: Retailers shopped, warehouse clubs – CHAID – Tree output, August 2017
                                                        • Figure 46: Retailers shopped – CHAID analysis, August 2017