billddrummer

Is Shift Away from Supermarkets, Restaurants Permanent?

Hi Judy,

As far as my reluctance to buy groceries at Wal-Mart:

The local stores seem to have a lower level of cleanliness compared to other grocery stores, and the meat and produce appear to be inferior quality compared to some of the other local chains. I do the bulk of my shopping at an employee-owned bag-it-yourself store, and have found comparable pricing to Wal-mart on packaged food with better quality produce and meat. Wal-Mart remains, however, the largest grocery retailer in the US.

I don't feel that Wal-mart customers as a whole are two steps from desperation. What we've seen here in Northern NV is that new Wal-mart stores have been built in middle- to upper-middle class neighborhoods, where you're more likely to see Mercedes and BMW vehicles in the lots than Chevys. Some older stores that were placed in lower income neighborhoods have the desperation stigma, though. But as a whole, I think the company has done an excellent job at upgrading its image. And it shows in its financial performance.

ATB,

Bill

Is Shift Away from Supermarkets, Restaurants Permanent?

Hi Judy,

I appreciate your commentary, no matter what industry you're covering. It's a pleasure to read your column.

As far as the shift from restaurants to dining in, I've seen that phenomenon in my own circle of friends. A year ago, it wasn't uncommon for several of us to dine out at least once or twice a week, spending around $20/per person per meal (food, drinks, etc.).

When gas prices shot up, that was one of the first things to go. But even since fuel costs are down, we're still eating in more than out. Now, it's a special treat to eat out--birthday celebrations and the like. I'd guess that my contemporaries now eat out only once or twice a month on average--a far cry from 8 times/month.

Now, grocery shopping is more important than the newest restaurant. And Whole Foods in Reno, along with Costco and Sam's Club, are getting the dollars that used to go to restaurants.

We're still reluctant to go grocery shopping at Wal-mart.

But the demand destruction caused by higher fuel prices has translated into a seemingly permanent behavioral change. Which may be the new reality for discretionary spending in America.

ATB,

Bill