The passing of Hurricane María last September left in its wake a changed consumer, who now makes more frequent trips to buy food, not only a grocery stores, but at alternative retail establishments as well.
Such were the findings included in this year’s Consumer X-Ray, published by the Chamber of Marketing, Industry and Food Distribution (known as MIDA for its initials in Spanish.)
“The X-Ray this year shows us a different consumer from what we had seen over the last three years. A consumer who went through a transformation process that led them to change their interests and priorities,” said Ricky Castro, president of MIDA.
In the study MIDA commissioned to IPSOS research firm, during the emergency, consumers significantly increased the frequency of their visits to all channels to purchase food.
Specifically, consumers confirmed visiting the grocery store an average of 11 times a month, followed by 6.5 times to bakeries, 4.4 times to gas stations and 2.2 times to the pharmacy.
In the case of supermarkets, the result is more than twice the normal frequency and was due to several factors such as lack of energy to store refrigerated products and the lack of goods in establishments.
After the emergency, the consumer seems to have held on to some of the new habits. Compared with prior years, there is a significant increase in the frequency of visits to stores other than the supermarket to buy food. One was the cash and carry, which reflected an increase of 0.28 percent in 2017 to 0.36 percent this year.
The same happened with pharmacies and gas stations, which became a primary place to meet the main fuel needs, which were then supplemented with food during the emergency.
“Visiting gas stations became a necessity. The lack of electricity forced the majority of Puerto Ricans to rely entirely on either gasoline or diesel power generators as an energy source,” said Freddie Hernández, chairman of the Consumer X-Ray committee.
The data showed that after Hurricane María, the number of consumers with power generators in their homes doubled to 41 percent from 21 percent.
In terms of total spending on food, the study found that it remained largely unchanged. However, the distribution by channels varied slightly with a similar pattern to the frequency of visits.
Although grocery stores remained the main go-to place to buy food, they experienced a slight decrease in spending of $261 in 2017 to $225 in 2018, with the difference transferred to the other channels.Restaurants reflected a significant increase in average weekly visits during the emergency.
Bonanza for restaurants
Meanwhile, due to the lack of electricity and the temporary exemption from Sales and Use Tax on prepared foods, establishments reflected a significant increase in average weekly visits during the emergency.
“Before the phenomenon, respondents said they visited these establishments an average of twice a week. However, we saw that during the emergency this number increased to nearly four times,” Hernández added.
“Currently, the average number of visits has been normalized mainly due to the recovery of electricity service and an interest by 28 percent of consumers to save money,” he said.
Moreover, the survey confirmed a change in the factors that motivate consumers to choose an establishment over another.
The three main reasons during past years were proximity, store specials, and regular prices, gave way to “variety,” which increased from 2 percent in 2017 to 11 percent in 2018.
“This year we see how the criterion of variety increased its importance when selecting the store where you buy food. All of these changed relate to the lack of items on the shelf that has been experienced since María,” said Manuel Alfonso-Reyes, executive vice president of MIDA.
According to Professional Market Research for the month of October the percentage of missing shelf items was 47 percent and today stands at about 20 percent when normal levels fluctuate at around 15 percent. This scenario has driven consumer to prefer those businesses, independently of the channel, that has a more varied food supply.
Reyes said this may have been a determining cause for three out of 10 consumers, or 29 percent, to have tried new product lines and brands during the emergency, representing opportunities for new products and businesses.
Similarly, according to the results, 35 percent said they had stopped using certain products and/or brands probably because they were not available and were replaced by the consumer.The study showed a drop in the use of manufacturers coupons could be another factor that validates that Puerto Ricans are not reducing their spending on food.
Some consumers did not scale back
This year, the study showed that 66 percent of respondents reported not having cut spending in total food purchases.
“We see that the number of people claiming to be making adjustments has stopped and reversed compared to this year. In 2017, 45 percent of respondents stated they were making adjustments in their purchases. Currently, only one third are doing that,” said Herbert Torres, purchasing manager for Supermercados Econo.
One of the factors that might influence this behavior is the increase in funds granted to new beneficiaries of the Nutritional Assistance Program, who represented 51 percent of respondents and who mostly confirmed having received the additional aid granted by the federal government as of March.
Meanwhile, the study showed a drop in the use of manufacturers coupons could be another factor that validates that Puerto Ricans are not reducing their spending on food.
“Although there is still a preference in the use of printed coupons, this faced a 15 percent drop, which shows that 49 percent of consumers do not prefer any format of manufacturers coupons,” said Mayreg Rodríguez, executive director of Supermercados Selectos.