Gibbs, John

Jones, Larry D.

Mather, Loys L.

English

Research Papers in Economics

WHICH RETAIL FOOD SERVICES ARE CONSUMERS
WILLING TO DO WITHOUT
by
Larry D. Jones, Loys L. Mather and John Gibbs
Assistant Professor, Associate Professor and Former Associate
University of Kentucky
Lexington, Kentucky
Background
In recent years the public has
become increasingly sensitive to rising
food prices. A study by Pennsylvania
State University indicated that two-
thirds of consumers surveyed in 1971 felt
that food prices were too high.~/ By
the fall of 1973, follow-up research
indicated that 85 percent of those
surveyed felt food prices were too high.
A portion of the increasing con-
sumer sensitivity toward rising food
prices can be explained by the long term
food trends that were reversed in 1973.
For example, spot shortages of food
occurred, particularly fruit and veg-
etables. Food prices increased more
rapidly than either wages or the prices
of so-called necessities such as housing,
clothing, medical care, and transporta-
tion.~/ The percent of disposable income
spent for food increased 1.3 percentage
points from 1972 to 1973, reversing a
downward trend which had existed since
the early 1950’s.
Given this background, a study was
conducted at the University of Kentucky
to provide an insight into 1) which
institutions and economic forces do con-
sumers feel are responsible for rising
food prices?, 2) what solutions are
favored for slowing the rise in food
prices?, and 3) which food retailing ser-
vices and practices do consumers feel
could be reduced or eliminated if the
rise in food prices could be slowed?
A summary of the responses from
the first three questions will be
prwided. Responses to the last ques-
tion on retail services will be
examined in greater detail. This
means of presentationwas chosen primar-
ily because earlier studies and recent
public opinion polls have provided the
food distribution industry valuable
data on the institutions and economic
forces that consumers feel are behind
rising food prices. However, there is
little data available which examines
consumer attitudes toward retail store
services in this inflationary economy.
Methods Employed
Four hundred households from 10
income strata were interviewed in the
Lexington, Kentucky Standard Metro-
politan Statistical Area. Lexington
was chosen because of its central loca-
tion, the varied demographic character-
istics of the population, and because of
its proximity to the University of
Kentucky.
Data Collected
Retail store trade literature and
earlier studies suggested various
retail services and practices which if
reduced or eliminated, could lower food
costs or keep food prices from in-
creasing as rapidly. These variables
lurnalof Food Distribution Research February 76/page 139included advertising, trading stamps,
games of chance, carry-out service,
check cashing, number of brand items,
store hours open, number of check-out
lanes, and personalized meat services.
Consumer profile characteristics
included age, sex, marital status,
education, income, city size, and shop-
ping frequency.
The collected data were first sum-
marized by percentage distribution of
responses. Chi Square Analysis was used
to determine the association between
profile characteristicsand consumer
attitudes.
Results
What are the Causes or Solutions?
Those consumers surveyed most
frequently blamed government and food
marketing agencies for rising food
prices. Farmers, farm organizations,
and consumers were least often held
responsible. Economic forces held ac-
countable for rising food prices
included inflation, corporate profits,
and rising wage rates. Farm profits and
farm programs were least blamed. solu-
tions that were favored for slowing the
rise in food prices included, decreased
government spending (78%), restrictions
on feed exports (667.), and price controls
(62%) .
Which Services are Consumers
Willing to do Without?
Consumers were willing to see those
retail store services or practices
eliminated or reduced which were largely
of a nonconvenient nature. In des-
cending order of agreement, consumers
said they were willing to eliminate
games of chance (83%), eliminate trad-
ing stamps (77%), reduce the number of
checkout lines
February 76/page 140
(66%) and reduce
advertising (61%). Generally those
consumers that favored reducing re-
tail services were well educated and
drawing higher incomes. These find-
ings are consistent with an IGA study
which found 71 percent of the respon-
dents against trading stamps and games
of chance. In addition, this study
found that 72% felt advertising should
be reduced and 66% favored reducing
retail store decoration provided reduc-
tion of these practices could be
reflected in food prices.
With the possible exceptions of
reduced check-out lines, consumers
appear unwilling to forego their present
level of convenience services for the
sake of lowering food prices. Less
than 36 percent favored eliminating
carry-out service and free check cash-
ing or reducing the multitude of brands
and items, and personalized meat ser-
vice. Respondents were evenly divided
(4&L) on the question of reducing the
number of hours retail stores open.
The remaining 12% were undecided.
Reducing the number of check-out
lines is an exception to their overall
attitude of not reducing the level of
convenience services. Sixty-six per-
cent favored reducing the number of
check-out lines if the reduction could
be reflected in food prices. Only 16%
were opposed and nearly 18 percent were
undecided.
Correlation with Consumer
Profile Characteristics
Consumer profile characteristics
were correlated with consumer attitudes
toward reduced or eliminated retail
services.
Those surveyed that favored re-
duced advertising generally were from
small households. Those that favored
elimination of trading stamps were
Journal of Food Distribution Researmost likely to be male, from larger
households, and well-educated. Those
that wanted to eliminate games of chance
were between 31 and 60 years of age,
married, well-educated, and higher paid.
Reducing the multitude of brand
items was favored by those who were
lowest paid, least-educated,and more
elderly, Reducing the number of check-
out lanes was favored by consumers over
60 years of age who shopped less than
once a week.
In summary, consumers apparently
would look with disfavor on a reduc-
tion in the number of level of con-
venience services or practices cur-
rently offered by their food retail
stores. On the other hand, they
appear to be quite willing to see
several nonconvenience practices (such
as games of chance, trading stamps,
advertising, etc.) either reduced in
their intensity or eliminated.
Table 1. Which Retail Store Services were Consumers Willing to do Without?
Disagree Undecided Agree
- percent -
Advertising (Reduce) 17.4 11.0 61.5
Trading Stamps (Eliminate) , 14.1 8.8 77.1
Games of Chance (Eliminate) 9.4 7.9 82.7
Carry-out Service (Eliminate) 55.1 11.5 33.3
Free Check Cashing (Eliminate) 53.6 12.1 24.4
Multitude of Brands and/or
Items (Reduce) 54.1 12.8 33.0
Store Hours (Reduce or Shorten) 43.2 12.8 44.0
Check-Out Lines (ReduceNumber of) 16.1 17.7 66.1
PersonalizedMeat Services
(e.g., Custom Cutting &
Packaging (Reduce) 52.8 11.4 35.9
FOOTNOTES
&/ Warland, Rex H., and Robert O. ~/ U.S. Dept. of Labor, Bureau of
Hermann. “Where do Consumers Place Labor Statistics. Monthly Labor
the Blame for High Food Prices;” Review, March 1974.
Farm Economics
lrnal of Food Distribution Research
9<*?k*******-k>wr>’c*
February 76/page 141

WHICH RETAIL FOOD SERVICES ARE CONSUMERS WILLING TO DO WITHOUT

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