Canadians' confidence on the rise, but new shopping habits emerge
by Tim Linden | May 18, 2010
VANCOUVER -- Canadians are feeling fairly bullish right now. They are happy
with themselves, and they believe the economy is improving.
Two different speakers armed with entirely different research gave their views
on this subject at the Canadian Produce Marketing Association convention,
held here May 12-14. Brian Williams, a well-known Canadian sportscaster,
gave the keynote address during the general luncheon session Thursday, May
13, to put forth his theories based clearly on anecdotal evidence. The next
morning, Carman Allison, director of marketing communications for The
Nielsen Co., used empirical evidence drawn on extensive research to offer his
reading of the data.
Mr. Williams believes that the hosting of the Winter Olympics in Vancouver in
February was a watershed event for the Canadian people. His hour-long
presentation was filled with stories and feel-good moments, but his main
contention was that the hosting of the Olympics brought all of Canada
together in an unabashed celebration of patriotism. He said that the feeling
was bolstered by how well Canadian teams did in many different events, but
he noted that it went beyond the simple celebration of victory.
The sportscaster said that Canadians have always admired U.S. fans who
seem to have the ability to boastfully celebrate their achievements. He
believes that Canadians, on the other hand, tend to be more reserved and
less able to boast. The Olympic Winter Games, and especially the final event
that featured the Canadian hockey team beating the squad from the United
States for the gold medal, unleashed an outpouring of emotion.
Mr. Williams believes that this emotional high will change Canada and
Some of Mr. Allison's research was conducted while the Games were being
held, but what impact they might have had was not measured. Nonetheless,
the data show that Canadians are more bullish than their U.S. counterparts
on the state of the economy. "Recovery" rather than "recession" is the new
buzz word, he said.
Nielsen surveys attitudes on a frequent basis, and the firm's representative
revealed that the latest findings show that Canadians are feeling quite a bit
more confident than their U.S. counterparts. On the scale used to measure
the confidence level, Canadians registered 92 compared to 87 in the United
States. That is still what he called a "neutral" reading but much better than the
reading more than a year ago, in early 2009. People in both Latin America
and the Asian Pacific registered a higher confidence level, but their respective
areas were never hit with the full force of the current recession. Of the Asian,
European and North American countries that were hit the hardest, Canadians
are the most confident of the current turnaround.
Interestingly, men are more bullish than women. Mr. Allison said that on
average, men's confidence level tends to run about six months ahead of
women's. In other words, women will meet the same confidence plateau six
months later. That is important because how an individual feels about the
situation determines his or her spending habits. Mr. Allison said that women
control the purse strings in many areas, including food shopping, so people
should expect increased spending to lag a bit behind the meter measuring
But even as Canadians view their country's economic condition in a favorable
light, the Nielsen researcher said that they will not return to their old buying
habits anytime soon. "There is what we call a new normal," he said.
He explained that during the recession, consumers frequented stores less
often but spent more each trip. This equated to an increase in spending at
discount and clubstore operations. These trends started before the recession,
Mr. Allison said, and will continue after it. He added that during the
recession, retailers tried to increase sales through huge discounts and
promotions. Consumers now have grown accustomed to buying products on
sale, and they will continue to do so. In 2007, one-quarter of all food items
were sold at a discounted price; in 2009, that number rose to 43 percent.
During the recession, niche and convenience stores took the biggest hit, with
large discounters at the opposite end of the scale, Mr. Allison said. As
consumers look ahead, they do expect to spend more money on produce and
meats. This bodes well for the fresh food industries. Consumers admit that
they cut back on these items when times were tough, but they look forward
to increasing their spending and returning to pre-recession habits on these
items. That contrasts with products such as paper goods, where consumers
learned how to save (buy in bulk and on sale) during the recession, and they
are indicating no desire to change that habit as the recession ends.
Mr. Allison also noted that the face of the discount shopper has changed. The
fastest growing segment in the discount demographic is people who are
relatively well off. Those making in excess of $75,000 and continuing well
into a six-figure income discovered discount operations during the recession,
and are indicating that they will continue to shop those venues. Consumers
are buying more products at these places, which does not bode particularly
well for innovative suppliers. The discounters, he said, tend not to be
innovative but rather offer deep discount on the big traffic-generating items.
If fewer people are shopping the specialty stores where most of the
innovation takes place, it stands to reason that there will be less innovation
in the area of new products.
But Mr. Allison did confirm the longstanding belief that "produce is a traffic
builder." Produce is one of the items that brings consumers into the stores.
Speaking specifically about fruit, Mr. Allison listed the hottest items as
persimmons (because of the significant population growth of Asians in
Canada), cherries, avocados, kiwifruit and berries. In his "what's not hot"
category, he named limes, figs, nectarines, papayas and plums. In the
vegetable category, artichokes, okra, kale, ginger and yams are the items
with the greatest percentage growth, while turnips, beans and bagged salad
took a hit, according to the Nielsen scan data.
All in all, he gave audience members the good news that they should expect a
sales growth rate in the food category that is higher than average for the
balance of 2010.
(Additional coverage and photos of the CPMA convention and trade show
appear in the May 24, 2010, issue of The Produce News.)