Latest IRI Research Finds a New Consumer Equilibrium Emerging as Economy Continues to Transform

IRI Uncovers Key Consumer Segments Driving Cost-Saving Strategies
CHICAGO--(Business Wire)--
It is no secret that the ongoing economic turmoil is dramatically affecting
consumers` shopping and purchase behaviors. Consumers are eating out less,
reducing the number of doctor visits and foregoing vacations to stretch their
limited dollars. But, which consumer groups are driving these cost-saving
strategies? The latest research from Information Resources, Inc. (IRI),
"Competing in a Transforming Economy 4.0: The New Equilibrium," leverages
post-inaugural survey results to identify key consumer segments that are leading
the change and helps retailers and manufacturers connect with their most
important consumers.

"Since the beginning of 2009, a new consumer equilibrium has emerged in which
behaviors initially implemented to weather the storm have the potential to last
well beyond an economic recovery," says IRI Consulting and Innovation President
Thom Blischok. "In this phase of our research, we went beyond studying the
common spending, self-reliance and self-health strategies that are becoming
common place in today`s environment and examined how economic pressures have
driven different types of consumers-by income level, household composition and
even varying consumer mindsets-to change their strategies."

The "Misery Index," which captures current consumer economic well-being and
expectations of future economic conditions, remains high for U.S. consumers at
more than 14 percent versus 13 percent in March 2008 and less than 8 percent in
March 2007. Forecasts indicate that 2009 will continue to be challenging and
2010 will improve slowly, which leads one to believe that consumers` current
spending strategies are not a flash in the pan. Perhaps even more important than
the strategies themselves, though, are the consumer groups who are driving them.
IRI has maintained an ongoing dialogue with consumers since the economy began
declining and has found that the following consumer segmentations play an
important role in understanding the drivers of saving strategies:

Income Level

IRI closely examined how income levels drive commitment to saving and cash
management strategies. For instance, do higher income households feel less
pressure to cut back with higher cash inflow? Or, do they experience more
pressure with the concern of replenishing their shrunken investments quickly to
support the leisurely retirement they had planned before the recession?

During the fourth quarter of 2008, IRI asked consumers if they were postponing
non-grocery purchases, such as electronics, furniture and clothing, and found a
whopping 69 percent of those earning under $35,000 were delaying these purchases
versus 63 percent earning $35,000-$54,00, 59 percent in the $55,000-$100,000
level and 46 percent in the over $100,000 bracket. In addition, 60 percent of
consumers earning under $35,000 are changing their definition of what is
essential compared to 58 percent earning $35,000-$54,000, 46 percent earning
$55,000-$100,000 and 34 percent in the over $100,000 bracket.

Household Composition

IRI also studied which spending strategies are driven by households with kids
versus households without kids. For example, do households without kids stick to
their preferred brands and products since they have fewer mouths to feed, or are
households with kids bending to picky eating habits and sticking to their
preferred products in certain categories?

While households with kids are most likely to reduce or postpone spending on
non-grocery purchases, affordable indulgences are quickly becoming a theme for
these stressed out consumers. In fact, 78 percent of households with kids
earning under $55,000 are postponing non-grocery purchases, but 64 percent of
this same consumer segment is treating themselves to affordable indulgences
compared to 54 percent earning the same income without kids.

Consumer Sentiment

Understanding the mindset of consumers who are driving strategies is a key to
success for retailers and manufacturers. IRI uncovered three emerging categories
of shoppers: optimists, maintainers and pessimists. Is the optimist the first to
adopt dramatic saving strategies, thinking the economy will get better soon, and
they won`t have to employ them for long? Or, is the pessimist driving the trends
in expectation of a long recession?

From its post-inaugural survey, IRI discovered that pessimists exemplify many of
the attitudes that are driving behavioral change across channels and categories,
such as searching for sale prices (87 percent versus 82 percent for all
households), making personal care products last longer (62 percent versus 55
percent for all households), and buying fewer prepared meals at grocery stores
(61 percent versus 55 percent for all households).

"Learning more about the specific consumer segments that are leading change
empowers both retailers and manufacturers to craft marketing messages targeted
towards their most important consumers and will also help to get these messages
in front of their consumers at the right time and the right place," adds
Blischok.

IRI Webinar

IRI is offering a free mini-webinar, entitled "Competing in a Transforming
Economy 4.0: An Update on Critical Watch Points" on July 9 at 1 p.m. CT. To
register for the webinar, hosted by John Porter, please visit:
http://us.infores.com/NewsEvents/EventsWebinars/CompetinginaTransformingEconomy/tabid/184/Default.aspx

About the Report

IRI`s "Competing in a Transforming Economy 4.0: The New Equilibrium" study is
now available. The study includes research results from multiple IRI sources,
including the company`s IRI AttitudeLink™ survey of 1,000 consumers, the IRI
Economic Purchase Longitudinal Database™, IRI Consumer Network™, IRI InfoScan®
Reviews, IRI Economic Trend Database™ and select outside sources.

To learn more about the study, visit:
http://us.infores.com/ProductsSolutions/AllProducts/AllProductsDetail/tabid/159/productid/122/Default.aspx.
For pricing and additional information, please contact John Porter at
john.porter@infores.com.

About IRI

IRI is the world`s leading provider of consumer, shopper, and retail market
intelligence and insights supporting 95 percent of the FORTUNE Global 500
consumer packaged goods (CPG), retail and healthcare companies. Only IRI offers
the unique combination of integrated market information, automated and
predictive analytics, innovative enabling technologies, and domain expertise.
With IRI, leading retailers and manufacturers are able to quickly discover
breakthrough insights driving smarter decisions and actions across the
enterprise for breakthrough results. Companies around the world depend on IRI
for improved productivity, stronger brands, and dramatic revenue growth. For
more information, visit http://us.infores.com.

IRI CONTACTS:
John McIndoe
E-mail: john.mcindoe@infores.com
Phone: (312) 474-3862
Fax: (312) 474-2512
or
Shelley Hughes
E-mail: shelley.hughes@infores.com
Phone: (312) 474-3675
Fax: (312) 474-2512

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