Shopper Confidence Insights

As household finances come under increasing pressure, shopper confidence has fallen to a record low. According to IGD, August saw the largest monthly drop in confidence on record, with all affluence groups affected. Shoppers are now more focused on saving money than seeking out quality, and it’s the 25-34 year olds, and those DE consumers on the lowest income, who have seen the biggest drop in confidence. With food & drink inflation at 12.7% yoy in July & predicted to reach 15%, we take a look at how shoppers are coping with the pressure and the impact on the sector.

A reported 75% of shoppers have reigned in their spending over the last 2-3 months, whilst 11% feel they are unable to reduce spending any further and are likely to turn to food banks for help. There are some key trends emerging in the UK Grocery sector over the last few months :

Shoppers switching to Private Label – sales of Private Label have reached record levels accounting for 51.6% of all sales & are growing at 7.3%. This will undoubtedly be driven in part by the strong performance of Aldi & Lidl, but we are seeing all retailers give focus to their Value ranges. Asda’s launch of its Just Essentials value range in May has been a hit with its shoppers, achieving sales in 33% of baskets. Demand is so high that Asda have limited purchases to 3 of any item until stocks are replenished.

Retailers offering less promotions – the number of products sold on promotion is much lower than in the last financial crisis of 2008, with 24.7% products sold on promotion in the 4 weeks to 7.08.22 compared to 30% back then. Shoppers are having to shop around the retailers to find the best value.

Shoppers switching stores – Aldi is now the #4 biggest retailer in the UK and Lidl is the fastest growing retailer with sales up 17.9%.  Aldi & Lidl together have gained an annualised £2.3 billion spend & 1.8% share, which brings into focus the impact of the changes in the grocery market being seen right now.

Consumers are finding other ways to keep control of their budget. 38% have been  keeping to a strict shopping list over the last 2 months, and 28% have switched to cheaper ingredients when scratch cooking. Many have started to freeze leftovers to reduce waste, or have started batch cooking & making more of economical devices such as slow cookers & air fryers.

These are undoubtedly challenging times for brand owners and retailers trying to navigate such huge shifts in consumer behaviour. It’s never been more important for brands, especially premium brands, to be crystal clear about what they stand for, so that consumers can make an informed decision about whether to buy their products. Whether its high quality, authenticity, innovation, trust or taste, there is a clear role for brands to play through difficult times.

Wynne Business specialise in launching products & driving brand growth with UK retailers. We can help with any aspect of the sales & marketing process & offer tailor made packages for SME’s. Speak to us about your brand today!  

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Source : Mintel News 13.09.22 | Kantar Worldpanel 12 w/e 07.08.22 | IGD Shoppervista Aug 22

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