Higher food prices and the slowing economy are forcing consumers to stretch their grocery pound - heightening competition among supermarkets and leading even chic spots, such as M&S & Whole Foods, to trumpet their bargains. Grocers report that shoppers are using more coupons, buying less expensive cuts of meat and increasingly seeking out store brands as they try to lower their food bills.
Meanwhile, supermarkets are offering discounts, petrol discounts and meals for two for ten pounds, to attract consumers who have seen food and beverage prices spike 6% in the last month.
Although the intensely competitive supermarket industry has long offered weekly discounts, analysts expect the promotions to escalate as stores work to build customer loyalty even as they're forced to raise prices.
"The question consumers are asking is who is going to give me a way to moderate my food costs." Although they can't stop the rising prices, consumers are finding other ways to cut food costs.
Shoppers themselves know that local food is cheaper because it travels a shorter distance to the store. Own label foods products are inexpensive options, frozen foods are cheaper than fresh foods and those with time scour the newspaper for discounts and use more coupons than ever.
Many supermarkets acknowledge that consumer cutbacks are squeezing their earnings this year. To deal with those declines, supermarkets are looking at other ways to cut costs. Mid-tier supermarkets and discounters are offering the most aggressive sales. Some of the more upmarket grocers, such as M&S and Whole Foods, want to protect their image. But most grocery analysts expect food companies to remain aggressive in their marketing. And the bad news is that we are not at the bottom of the recession yet, there is more discounting and more innovative ways needed to help the consumer make ends meet.
