Magazine article Amber Waves

Changes in Income Have Small Effect on Where a Household Shops for Milk

Magazine article Amber Waves

Changes in Income Have Small Effect on Where a Household Shops for Milk

Article excerpt

When purchasing food, households make many choices, including not only what to buy but where to shop. And the options are many -traditional supermarkets, specialty foodstores, supercenters, drug stores, and more. Different types of stores offer different mixes of services, food products, and prices. Households with less income would be expected to patronize less expensive store types.

However, a recent ERS analysis found that this is not always the case, at least when households purchase fluid milk. Lower income households are a little more likely to buy their milk from stores other than supermarkets and club warehouse stores, including convenience stores where prices are often higher.

ERS researchers used 2007 and 2008 Nielsen Homescan purchase and demographic data for 24,110 households to develop a new choice model to analyze how changes in income affect U.S. consumers' milk purchasing decisions. The model simultaneously accounts fora household's demographic characteristics and past shopping behavior as well as retailers' prices, product assortment, and use of coupons and promotions. The model was then applied to a household's choice among seven store types when buying milk -supermarkets, drug stores, mass merchandisers, supercenters, club warehouse stores, convenience stores, or all other types of retailers that sell milk, including dollar stores and military commissaries.

Club warehouse stores were the least pricey location to buy milk, averaging $2.95 per gallon in 2007-08. …

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