The declining economy brought with it a dismal outlook on the fate of the growing natural and organic food channel. Dire predictions that the growth of recent years would be lost along with 401(k) balances—and that shoppers would focus only on lower prices—turned out to be mostly ill-founded.
Indeed, consumer interest in healthful foods has proven to be a bright spot; continuing to grow and showing no signs of waning, regardless of the economic state. The lesson here is shoppers don’t hold price to be the lone criterion for a purchase decision. This is true for both the aging Boomers, who are paying more attention to their health, as well as the young millennial who is interested in a more genuine experience.
As the economy spiraled downward, so, too, did prices at many stores, in an attempt to keep shoppers in the store as they looked for greater value for their dollar. But concerns about health remained at the forefront; while many shoppers cut back on “luxury” items, healthy foods were less likely to be included in that category than in previous years. In fact, while shoppers are more careful, they are less willing to compromise for the money they do spend.
The secret to successfully maintaining a robust healthy food business in the midst of economic strife is to maintain a focus on the shopper—what does she really want and what constitutes value? While it’s true that price is of greater importance than before, it’s hardly the magic bullet for driving long-term sales growth and shopper loyalty.
Retailers make the conversation about price when times get tough for one reason—it’s easy and they know how to do it. But it’s rarely the right answer, and recent revenue and profit results from retailers who made this their sole sales strategy prove the short-sightedness of this move.