"Downturn Generation"Reports Permanently Changed Behaviors

The current recession has created a new niche of consumers identified as the "Downturn Generation" by Information Resources (IRI). This new generation of Americans is adopting practices similar to Depression-era shoppers, implemented both to weather the recession and to keep a close eye on spending long after the recession ends.

According to the IRI report, "Dissecting the Downturn Generation: Recognizing and Leveraging Permanence in Today's Transformational Economy, highlights how shoppers are changing behaviors to adapt to the unstable economy and uncovers the new habits they intend to continue even if the economy improves. The report reveals permanently changed approaches toward important rituals, including diet, self care and home maintenance and classifies three emerging categories of shoppers, which are:

-Optimists - believe "things will get better during the next 12 months," are spending wisely, cutting back selectively and making sacrifices as a last resort

-Maintainers - agree that, "the economy won't get worse, but it won't get better either" and are also spending wisely, but are more aggressive about making cutbacks

-Pessimists - identify with the direst predictions, believing "if you think times are hard now, next year will be worse" and are cutting back wherever possible and hunting tirelessly to find deals

"Optimists, maintainers and pessimists are each weathering the recession in unique ways, but all three groups have made obvious behavioral and attitudinal changes and many admit they intend to prolong the use of their new methods," says Thom Blischok, president, IRI Consulting and Innovation. "We believe the Downturn Generation will continue their current behavior patterns until they have regained confidence in the U.S. economy. Interestingly, shoppers looked for a return of stability as a signal that the economy is pulling out of the recession, in particular, stability across gas, food and energy prices, as well as home values."

Shoppers Still Dramatically Impacted by Weakened Financial Position
Shoppers remain significantly concerned about the "American Dream" as concurrent pressures on housing, energy, transportation and automotive markets affect their ability to own a home that rises in value, hold a job with security, build savings and gain access to credit sources. Among the notable responses:

-Nearly 64 percent of shoppers characterize their financial condition as a little or a lot worse off than last year; approximately 30 percent believe their finances will be a little or a lot better one year from now.

-Seventy percent of shoppers note they have less savings than they used to, while an equally significant 71 percent agree they have less total wealth.

Even though gas prices have declined as much as 50 percent from the highs of fall 2008, 73 percent of surveyed shoppers state rising gas prices "Impacted" or "Strongly Impacted" their financial situation during the past six months. In addition, 75 percent note rising food prices "Impacted" or "Strongly Impacted" their financial situation, even though food prices have largely leveled off or declined since summer 2008.

Shoppers' weakened financial conditions are profoundly affecting how they shop and what they buy:

-More than 69 percent say they are more likely to look through retailer ads for deals.

-Nearly 82 percent are more likely to look for sale prices once in the store.

-Just under two-thirds (65 percent) say price is becoming more important than convenience in brand purchases.

"Financial pressures are causing shoppers to give up favorite brands, buy smaller quantities of preferred items or postpone non-essential purchases for entertainment in order to save money for their most important needs," adds Blischok. "Additionally, between 30-47 percent of consumers are buying less healthy products, and fewer fresh produce and organic items. This is a fundamental shift from the trends we noted before the economic downturn."