As Thanksgiving jump starts the holiday meal season, consumers are seeking the traditional festive fixings with a more deliberate approach to spending as food costs remain high.
Faced with higher grocery costs but still determined to deliver a memorable holiday meal, Thanksgiving shoppers are becoming more intentional about what earns a place on the table, selecting products that can justify price through convenience, quality, nostalgia, health benefits or other meaningful outcomes.
Nearly half (47%) of consumers expect to spend more on Thanksgiving this year, largely because food prices remain elevated, according to NIQ. The cost of Thanksgiving staples like cranberry sauce and turkey breast increased 15% and 12%, respectively, over the last 52 weeks. Pie crust prices were down 2%, year over year in the 52 weeks ending Sept. 5.
Despite expectations to spend more, shoppers are looking for ways to counter those costs: 46% plan to buy more store brands, 21% will use lower-cost brands or cuts of meat, 21% will forgo non-essential items or side dishes, 15% will buy smaller quantities and 12% will serve smaller portions, according to NIQ.
‘We have to start thinking about value differently’
Along with these behavioral shifts comes a broader change in how consumers define value.
“We have to start thinking about value differently,” as consumers face economic volatility from compounding inflation and geopolitical tensions placing increasing pressure on the global food supply chain, says Chris Costagli, VP of Food & Beverage Thought Leadership at NIQ.
While consumers historically viewed “value” through a price lens, they are increasingly considering the return on investment on each purchase.
“Value is equal to justification divided by price,” he said.
That justification, which is subjective by nature, can take many forms.
“It could be a flavor, it could be a size, it could be an experience, package, functional benefits, memory, and association with something else. The fact that it feels nostalgic, the Thanksgiving stuffing that Mom used to make. It could be convenience,” Costagli explained.
As shoppers evaluate purchases, he said, they are ultimately asking one central question:
“Is it worth it?”
Promos and sales become a holiday foundation
“There’s going to have to be a trade-off,” Costagli says, whether that’s through promotions and sales or simplifying menus and using ingredients that are already on hand.
“We’ll still have the traditional Thanksgiving. But I think it’s going to be a pared back version as people try to navigate the desire for tradition with the affordability reality,” he added.
The opportunity for private label
Private label appears to be well positioned for holiday shopping as consumers search for ways to create festive menus.
“They see private labels as just a more affordable brand that’s out there on the shelf that still delivers the outcome that they’re looking for,” Costagli said.
Value can justify premium products too
Costagli argues that premium brands can remain competitive if they clearly communicate why they deserve a higher price point – which is where attributes like functional ingredients, clean label, sustainable sourcing, animal welfare or ethical sourcing can drive value.
“If we move beyond this idea of just trying to sell a product to a consumer, and focus more heavily on the outcome, what that product does for the consumer, I think that helps connect the product better to that value equation,” Costagli said.
“If your finances are strapped, you’re looking for outcomes. You’re not just looking to go and put things in the cart. What are the products I’m buying actually going to do for me?”
That means brands should focus less on features and more on explicitly communicating benefits.
“This product will save you 20 minutes on a busy weeknight,” he said as an example. Or, rather than simply highlighting protein content, brands can communicate that the product “is going to keep you fuller longer.”
Ultimately, Costagli argues that shoppers are still willing to pay more when they see clear value.
“If you create value for consumers with the right justification, what consumers are looking for, you can be more expensive. You just have to earn it.”
Leftovers remain part of the value equation
Value continues after Thanksgiving dinner ends.
Consumers continue to intentionally prepare extra food, with 38% saying they overcook to avoid running out and 36% doing so specifically to ensure leftovers, while 2% say they would prefer not to have leftovers, according to NIQ.
Among those planning ahead, 44% intend to make leftover sandwiches or wraps, 40% plan to send food home with guests and 26% expect to freeze or vacuum-seal leftovers.
Consumers maximizing the products they purchase could become another way for retailers and brands to demonstrate value.
“Retailers, if they do that right, and they partner with manufacturers that are really focused on longevity of products and being used in additional meals, might be able to get a couple more items in the basket.”
