3 Ways Your Income Impacts Your Grocery Shopping Habits

For some of us it’s a monotonous chore, and for others it’s an enjoyable experience. The average U.S. shopper makes between four and seven trips to the grocery store each month. As a regular part of the weekly routine for many of us, we develop shopping habits, set list items, and we may even have a preferred route of travel through the grocery store — beverage section first, then dry goods, then cold and frozen foods, and after that, produce.

A variety of marketing strategies are based on our shopping behaviors. Higher priced products are located at eye level, and certain featured items are placed at the end of each isle. As consumers, we have a great deal of common shopping characteristics. The average supermarket carries around 45,000 choices, and certain items like soda, milk, eggs, cereal, bread, snacks, and frozen foods are some of the items most of us have in common on our grocery lists.

While our shopping habits are similar in some regards, we all have different tastes and certain shoppers have unique characteristics. Income level largely influences our grocery shopping decisions and those in the highest earning groups have some commonalities, just as do those in the lower earning groups.

Using the Bureau of Labor Statistics’ most recent consumer expenditure survey, coupled with supplemental information, we were able to determine what each of the nine income groups have in common when it comes to grocery shopping behaviors. Here are a few of the traits each group shares.

Source: Adage http://adage.com/images/random/walmart_avecust.pdf

Source: Adage

Retailer Choice

The above chart, (although a bit dated) displays the income levels of Wal-mart shoppers. As per the chart, many lower income groups favor Wal-mart’s low price model. Other retailers, like Publix, place customer service first, and competitive prices lower on the priority list. “We believe that there are three ways to differentiate: service, quality, and price … you’ve got to be good at two of them, and the best at one. We make service our number one, then quality, and then price,” Publix president, Todd Jones, said to Forbes.

While you may see a few lower income shoppers buying their groceries at a store like Publix, this is the exception rather than the rule as most Publix stores are located in middle or higher income areas. Lower income shoppers are more inclined to shop at lower priced grocery stores, such as Save-a-Lot or Aldi. In extremely low income areas, residents may shop at corner stores and smaller convenience stores as those within these groups may not have the transportation necessary to travel to a full-service grocery store on a regular basis.

Source: Thinkstock

Source: Thinkstock

Food Choice

The BLS consumer expenditures survey breaks up consumer units into nine distinctive income categories, ranging from those who earn under $5,000 during a twelve-month period to those who earn in excess of $70,000. Within the lowest three income categories — those who earn less than $5,000, those who earn between $5,000 and $9,999, and those who earn between $10,000 and $14,999 — the overall food budget was within the same range of between $3,150 and $3,500, but food spending was highest within the lowest income group.

Within the lower income groups, spending on the various meats — beef, poultry, fish, pork, and other meats — is more evenly spread across each type. For instance, within the second lowest income group, around 23 percent of spending on meat was for beef products, around 23 percent went to pork products, about 22 percent went to poultry, 10 percent went to fish, and about 15 percent of spending was on other meats. The higher income groups spent a larger portion of their meat budget on beef and in some cases, fish. This may result from a tendency within lower income groups to shop based on sale prices, where higher income groups stick with their favorites, regardless of price.

Spending on fats, oils, and sweets was relatively similar across the various income levels, ranging from around 6 to 8 percent of grocery spending. Although some of the lower income groups spent a higher percentage of their total grocery budget on these items, the differences was not as marked as you may expect.

Surprisingly, those in the under $5,000 category had higher spending on fresh fruits and vegetables than some of the other income groups, however, those in the above $70,000 category had the highest spending on fresh fruits and veggies (as a percentage of their grocery bill.) In all income categories, spending on fresh produce exceeded spending on processed fruits and vegetables, however, certain income groups — particularly the middle earners — bought fewer of these processed goods.

Source: USDA http://www.fns.usda.gov/snap/eligibility

Source: USDA

Overall Spending

According to Feeding America, those households with net incomes under poverty level or gross incomes under 130 percent of poverty may be eligible for food stamps. Around one out of every seven households receives food stamps. The above chart displays the income levels throughout 48 states and D.C. Based on these charts, consumer units from at least the first three income levels generally apply for SNAP benefits. These benefits allow for increased grocery spending over a household without such benefits. According to the BLS survey, those within two of the lower categories — those who earn between $5,000 and $9,999 and those who earn between $10,000 and $14,999 — have public assistance, food stamp, and/or supplemental security incomes in excess of $1,300.

In most states, food stamps are distributed either once or twice a month so those in lower income categories, receiving food stamps, may opt to make one or two large grocery trips and purchase larger quantities of non-perishable goods. Organic and healthy foods sometimes come with a higher price tag than some of the canned processed alternatives, and it logically makes sense for higher income households to eat better than lower income households strictly based on affordability.

Overall, given the survey results, it doesn’t appear that one income group eats substantially better or healthier than another. The survey, however, is not all-inclusive.

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