Worried workers cutting back on food spending

03.25.09
By Gerri Detweiler

Some 90 percent of U.S. employees are planning to rein in spending this year, with nearly half saying they will cut back on food and dining, according to a Tell It Now  survey recently released by ComPsych Corporation, the world’s largest provider of employee assistance programs and worldwide leader in GuidanceResources (EAPs, behavioral health, wellness, work-life and crisis intervention services).

The Commerce Department's Bureau of Economic Analysis reports that consumer spending on food in the fourth quarter of 2008 fell 3.7% from the third quarter, after adjustments for inflation. This is the biggest drop seen since the department starting tracking this type of spending.

While saving money is generally seen as a positive behavior, there are concerns that penny pinchers may cut out healthy food in favor of less expensive, less healthy items. "As people cut spending on food, trends show a step down from higher quality restaurants to fast food," said Dr. Richard A. Chaifetz, chairman and CEO of ComPsych. "This is obviously bad for employer-sponsored wellness programs, as workers' diets may become significantly less healthy.

In the survey, employees were asked: Are you taking steps to save money? If so, where do you plan to cut back most?

• 47 percent said "Food/dining out"
• 13 percent said "Entertainment (movies, concerts, travel)"
• 10 percent said "Services (dry cleaning, pet care, personal grooming)"
• 9 percent said "Clothing or misc. items"
• 8 percent said "Technology (Internet, cable TV, cell phone plans)"
• 2 percent said "Commuting/driving habits"
• 1 percent said "Health care"
• 10 percent said they are not taking steps to save money this year

To help employees tighten their budgets without scrimping on quality foods, some employers are providing help by way of cooking classes or healthy recipes. In addition, budget-conscious consumers are trimming costs in numerous ways, including:

• Using coupons when shopping
• Stocking up on staples at discount and warehouse retailers
• Using slow cookers to prepare meals in advance
• Making and freezing meals
• Buying local fruits and vegetables from farm cooperatives
• Growing their own vegetables and herbs
• Eating out less frequently and choosing less expensive restaurants.

Nutrition experts are warning that lower-income consumers are more likely to be obese and fear that a continued recession will lead to increasing health problems. They point to continued strong sales at fast food restaurants such as McDonalds as evidence that as Americans spend less, their diets may be deteriorating.

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Budget-conscious consumers are trimming costs in numerous ways.