One train of thought is shoppers will tend to move away from premium prepared foods towards cheaper alternatives as the purse strings are tightened.
Another theory is consumers may well look to increased component cooking in an effort to reduce outgoings.
This should be good news for the hearty potato, but what are we actually seeing happen in the marketplace?
The potato is a staple food in households across Britain.
Over 96% of households in Britain purchased the category at least once in the last year and on average British households purchased potatoes 30 times in the last year – more than once every two weeks.
The category as a whole is worth £997m in the latest 52 weeks, with value sales up 8% on the previous year.
What has driven this growth in the last year?
Well, we are seeing slightly more shoppers purchasing, which has brought incremental volume into the category.
However, given that almost all households buy into the category growth through new shoppers is always going to be limited – the key to growth is generating increased spend from existing shoppers.
In the last year we have seen shoppers purchasing more frequently and this has been the key driver behind the volume uplift in the market.
On top of this we have seen price inflation of 4%, which has driven accelerated expenditure performance.
In terms of sectors, old potatoes continue to dominate category sales accounting for 47% of total potato expenditure and 59% of volume purchased.
Old potatoes have also seen the greatest year-on-year growth in the latest year, outperforming the category with double-digit expenditure growth of 12%.
So what has happened in the last 12 weeks?
When we look at performance in the latest 12 weeks to 20 April 2008, compared to the same 12-week period in 2007, we see performance has actually increased in volume terms but slowed in value terms as prices are reduced.
The key difference in the last 12 weeks is we are seeing shoppers buying more per trip rather than buying more frequently, which could be the consumer response to lower prices in the last 12 weeks.
As well as the current economic situation it is worth considering the impact of the weather.
We haven’t experienced the same good weather this year as we had in spring 2007, which may have benefited the category in volume terms.
When we look at sector performance in the last 12 weeks the key winner is the old potatoes sector, which has experienced accelerated levels of value and volume growth.
Can this be attributed to the poorer weather or is this evidence of shoppers returning to staple foods as the credit crunch hits home?
