Supermarket PCW and Household Income

Project PCW
December 3, 2018

Gravitec Development is undertaking a major exploration of supermarket per-capita expenditures.  This email is another set of notes that discuss our findings.

Last Monday we looked at the relationship between Supermarket PCW and Household Size, the most useful predictor of PCW. This week we will examine the relationship between Household Income and Supermarket PCW.

There is a direct relationship between Household Income and Supermarket PCW; as the household income goes up, the PCW goes up.  While income is the second best predictor of Supermarket PCW, it is not very strong. Using data from 2017 we can see that income only accounts for about 13% of PCW variance.

The chart below shows how PCW increases as Household Income increases, but it’s a pretty bumpy ride! In fact, this relationship has a gentle slope until the income gets to about $100,000 per year, then the slope (usefulness) increases more dramatically, just as Food Away increases.  In fact, income is almost irrelevant until it reaches about $50,000.

In coming weeks we will explore this complicated relationship more. Still, we can say with certainty that households with more than $100,000 income are not afraid of spending more for supermarket-type items, while the lower income ranges are still far more dependent upon family size.