Shopping behavior in food retail markets: Consumer types and methods

Joyia T Smith, Purdue University

Abstract

Typically, it has been the view that households in a given market pay the same prices for the foods they buy, and that any large differences in food costs reflect differences in the types and qualities of foods purchased. However, this may not be true. Consumers vary in their propensity to search for prices across food retail outlets, but some households may be consistently paying lower prices for the foods they buy, simply by careful shopping. Little is known about the types of households that shop wisely and there is also little understanding of the magnitude of possible savings per year. Discovering the differences, if any, amongst households’ behavior may help to pinpoint ways to help consumers, especially the low-income population, develop better shopping behaviors. If there are significant differences in the way households shop, it may be worthwhile to encourage households, especially those with limited means, to develop their shopping skills and to assist them in doing so, or simply alert them to the possible value of careful shopping. Using AC Nielsen scanner data, this research describes the characteristics (types) of households that consistently save money while shopping for food. Quantifying the differences amongst households’ behavior and exploring the potential reasons for these differences can help make evident possible hidden costs of varying household structures, which can lead to better household management and perhaps inform social policy. A measure of household price search is developed to determine who these money saving households are and the methods they are using to save.

Degree

M.S.

Advisors

Chen, Purdue University.

Subject Area

Home economics|Economics|Agricultural economics

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