FMCG manufacturers and grocery retailers need to consider wider consumer concerns as much as profit as they enter the busy Christmas period, an industry specialist has warned.
Anthony Carr, Managing Director of FMCG and retail capability specialists Sellex, said with the cost of living remaining at the front of shoppers’ minds, price will be a priority for many. However, he noted that shoppers are increasingly making their purchase decisions based on the products that fit with their environmental, ethical and sustainability concerns.
“Given this week’s news that the economy has essentially flatlined, maintaining sales and profit are going to be key in the Christmas trading period, especially with costs still high and the likelihood that shoppers will be keeping a cautious eye on their spend,” said Carr.
“But retailers and manufacturers need to balance that by ensuring that what they are offering for the holiday period and the way in which they are offering it also fits with the sustainability concerns that are increasingly influencing consumer preferences.”
This follows research published earlier this week by Fiverr International that more than 85% of UK retailers plan to offer steeper festive discounts this year, a significant increase given that only 54% in 2023 and 57% in 2022 planned to offer higher discounts. A third of respondents (32%) said they plan to prioritise good deals when shopping, indicating that the cost of living crisis has not yet ended.
“Combining value propositions with meeting sustainability demands may appear difficult, but are not necessarily impossible,” said Carr.
“Brands and retailers need to show that they are on the same page as their shoppers, whether that is through reducing food waste or more sustainable packaging and recycling options. This could be an opportunity, for example, to push the frozen food category, with evidence suggesting consumers believe frozen food decreases food waste compared to fresh food.”
Carr suggested that actively encouraging consumers to shop sustainably could be one of the factors that draw shoppers from one retailer to another during one of the busiest periods of the year.
“Shoppers want to buy sustainably, but they look towards brands and retailers to show them how to do so. They want easy options that align with their current shopping behaviours. Those that can achieve this will likely have the most success this year,” he said.
