What Consumers Buy Over and Over Again
American consumers have an average annual income of $63,784 before taxes and spend $51,100 of it. Five categories of goods and services eat up about 82 percent of that purchasing power, according to a February 2015 report from the U.S. Bureau of Labor Statistics (Opens as a PDF). (Bear in mind that BLS is basing those numbers on "consumer units," which are just as easily individuals as they are families.)
So I got excited when I read this line in HubSpot's blog post on Tuesday: "Research shows Americans buy the same 150 items, which [account] for 85 percent of household needs." I wanted to know what those were, so I flipped to the "research," which was a 2011 Harvard Business Review article saying "The consultant Jack Trout has found that American families, on average, repeatedly buy the same 150 items …"
When I found Trout's comment in an excerpt of his copyright 2001 book, "Differentiate or Die," I saw the same information.
"It's been estimated that there are 1 million SKUs (standard stocking units) out there in America," reads the excerpt. "An average supermarket has 40,000 SKUs. Now for the stunner. An average family gets 80 [percent] to 85 percent of its needs from 150 SKUs. That means there's a good chance we'll ignore 39,850 items in that store."
An Associated Press article from 1985, instead citing the Conference Board, says the same thing.
So let's compare and contrast 2015's BLS report, which covers 2013 numbers, with numbers from 1985 in one of the top categories of consumer spending:
- In 2013, Americans spent 12.9 percent of their incomes on food, according to the BLS report. They ate 7.8 percent of what they bought at home and 5.1 percent out—coinciding with the Conference Board's February 2015 statement that consumer confidence "remains at pre-recession levels."
- By contrast, U.S. consumers actually spent a lot less at restaurants in 1985 than they do now. But then, the board termed it as a sign of consumer confidence that, according to AP, "Americans are spending a larger share of their food dollars on eating out. More than 32 percent of the nation's food dollars are spent on restaurant food, up from 28 percent in 1970 and 17 percent in 1960."
- Consumers aged 35 to 44 spent the most on food in 2013 at $7,920 a year. The AP tells a different story about 1985: "People younger than 35 make 31 percent of all food expenditures, up from 22 percent a decade ago. But these Baby Boomers will move into the 35-to-44 age bracket in the next decade, and that group will become more important to sellers."
Now for the other 69.1 percent of that 2013 consumer unit's $51,100, according to the BLS numbers from February 2015: