Yahoo Finance

DENVER, Sept. 24, 2024 (GLOBE NEWSWIRE) -- Ibotta, Inc. (NYSE: IBTA), the leading technology company providing digital promotions and performance marketing solutions, today released its second annual State of Spend report providing a comprehensive look at spending trends among U.S. consumers and consumer packaged goods (CPG) marketers alike. According to the study, 72% of shoppers say the economy has directly impacted their grocery spending habits, with a majority trading down to lower-priced alternatives in the face of rising grocery costs. In turn, marketers are placing greater emphasis on customer acquisition and long-term brand building to differentiate as private label competition grows.

Ibotta’s findings are based on responses from more than 5,400 survey participants, including grocery shoppers and CPG brand marketers, and underscore the importance of utilizing promotions as an effective tool for creating long-term brand loyalty and value for shoppers – 75% of whom said they would try a different brand if it is offered at a lower price than what they usually buy.

“This year’s State of Spend highlights the ongoing consumer struggle to overcome the compound effects of years of high grocery prices and stagnant shopper budgets, leading to growth in lower-cost private label brands,” said Bryan Leach, founder and CEO of Ibotta. “If shoppers take an exit ramp to a private label product, brands understand that the cost of inaction is steep. As they think strategically about how to win consumers back, digital promotions have proven to be one of the most cost effective and immediate solutions for growing market share.”

Key findings from Ibotta’s 2024 State of Spend research include:

State of Spend: U.S. Grocery Shoppers

• Consumers are spending more on essentials – and less on everything else. Shoppers reported spending an additional $302 on food and beverage essentials over the past year – causing people to cut their spending in more discretionary categories like personal care/beauty (down $9), pet care (down $5), health, (down $5), and cleaning/household (down $3). Within food and beverage, the categories with the biggest declines in year-over-year purchases may also be seen as discretionary: alcohol (down 8%), plant based meat/dairy (down 5%), snacks (down 4%), and frozen foods (down 3%).

  • Regardless of product necessity, more than half of consumers report switching to a less expensive alternative if something they normally buy has an increased price.

• Shopping habits have evolved to meet budget and time constraints. Significantly fewer people are shopping at least once a week (80% in 2023, down to 77% in 2024), with the presence of a rewards or loyalty program being the top deciding factor for shoppers when choosing a grocery store.

  • Even though average monthly spend on household staples is flat year-over-year, 60% of consumers believe they are spending more this year compared to last. 70% say inflation has negatively impacted their household finances in the past 12 months, and 72% agree that the economy has a direct impact on their grocery spending habits, specifically.

• Decision-making at the grocery store tends to be influenced most by price, quality, store sales and familiarity, respectively. This makes it harder for brands to get in the door with new consumers, as 74% of grocery purchases are repeat purchases (compared to 26% which are new).

  • Brands have an opportunity to encourage trial by using competitive pricing and promotional strategies. 75% of shoppers say they will try a different brand if it is offered at a lower price than what they usually buy, while 64% agree that price is more important than brand name.

  • Grocery stores and retailers can tap into shoppers' desire for value by offering promotional rewards to drive repeat business and sales. 78% of shoppers say they are more likely to return to a grocery store if they offer cash back, and 75% are more likely to buy more items if they can redeem a promotional offer.