Changing Consumtpion in the New Economy

To the backdrop of recent Nielsen and Australian Bureau of Statistics figures on consumer spending and behaviour,the FMCA educational "Changing Consumption in the New Economy" posed the questions of who is buying what, when and why. A panel of three experts with a wide range of retail food experience addressed those questions, with ABC radio food editor and FMCA Hall of Fame recipient Barbara Lowery moderating the lively session.

The panel comprised: Simon Ford, Director,The Advantage Group. Simon started his career in the UK with the Millward Brown research agency, working on strategies for companies such as Guinness and Reckitt & Colman, and was Head of Market Research for Tesco for six years before coming to Australia.

Gawen Rudder, FMCA member, Business Services Manager at the Advertising Federation of Australia and columnist for both foodService and Retail World. He has more than 30 years experience in food and beverage and has worked on the likes of Angus Australia, Australian Dairy Corporation, Ayam Foods, Healtheries (Aussie
Bodies), Jalna Dairy Foods, Meat & Livestock Australia, Meadow Lea, McDonald's, Nestlé,Woolworths and Yalumba.

John Baker, FMCA member, Chief Executive, Produce Marketing Australia. John established Produce Marketing Australia in 1998, and has more than 35 years experience in fresh fruit and vegetable production and marketing. He was previously Managing Director of the Australian Horticultural Corporation (AHC), as well as
managing the Sydney wholesale fruit,vegetable and flower markets. Following are some relevant statistics and, on page 4, summaries of the speakers' presentations.

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A ccording to a recent bi-annual Nielsen Retail Barometer Report, 74 per cent of consumers have said their lifestyle has been negatively affected by increased fuel prices and that they have reduced their spending on non-essential items.

Figures from the Australian Bureau of Statistics (ABS) for the June quarter show that fuel prices increased the cost of transport by 3.1 per cent in the last quarter alone,and average rents rose in all capital cities to be the largest quarterly increase since March 1989.

Supermarkets are still the most visited venues and where the most money is spent. But the popularity of gourmet food stores continues to rise as consumers demand better quality and are prepared to shop around and pay a premium. They are increasingly supporting their local communities,and the focus on 'fresh' is predicted to continue.

In the area of Fast-Moving Consumer Goods, some 45 per cent of FMCG respondees said the economy had deteriorated in the past 12 months,with 39 per cent predicting that conditions would get worse in the next two years. Although FMCG manufacturers predicted gloomy business conditions,24 per cent of the surveyed manufacturers predicted increases in sales growth,with just 3 per cent predicting negative sales growth.

ABSfigures indicated that the overall cost of food dropped by 0.1 per cent in the June quarter, with the price of fruit and vegetables dropping the greatest (by 7.4 per cent and 6.5 per cent respectively) in comparison with rises in most other food categories.

Food prices rose 3.9 per cent from June 07 to June 08.The price of poultry rose by 11 per cent and soft drinks, waters and juices rose 5 per cent. During the same period, fruit, vegetables, and bacon and ham dropped in price.

Fast food and take-away prices were up by 1.7 per cent, milk jumped 12.1 per cent,cheese 14.2 per cent,bread by 6.8 per cent and restaurant meal prices rose just 1.2 per cent.