The ongoing cost of living crisis is continuing to prompt more consumers to switch their grocery spend to discounters such as Aldi and Lidl, as well as making shoppers less loyal to the grocery brands they buy from.
UK shopper research by electronic shelf label provider Pricer reveals that 92% of people are now price conscious, rising by 33 percentage points since 2021 before the inflation squeeze began, and increasing to 94% of Millennials and 96% of Gen Z. Almost nine in ten (87%) stated that they now actively seek out more deals and discounts when shopping for groceries – up from 60% in 2021, a 27 percentage point increase – and rising to 92% of female shoppers. Meanwhile, 72% of shoppers now seek out the cheapest prices on the grocery items they buy.
With Kantar’s latest figures showing grocery price inflation rose again in March, hitting 17.5%, the highest level ever recorded by the analyst, it estimates a quarter of UK shoppers are struggling with the cost of groceries. A separate study by thinktank, Resolution Foundation, suggests wage stagnation for UK workers is exacerbating the cost-of-living squeeze further, with consumers £11,000 worse-off in terms of real-term wages compared to 15 years ago.
Pricer’s survey showed that this inflationary pressure on consumers’ disposable incomes was prompting 61% UK shoppers to switch some of their grocery shop from their traditional supermarket brands to discounters, such as Aldi or Lidl, while 56% said they had swapped their entire shop to discounters.
90% of shoppers in Pricer’s poll said they had chosen to switch to discount supermarkets due to cheaper prices. However, 19% cited more choice of own-label and value ranges being available at these stores, while 17% felt the products on offer were of better quality.
Of those sticking with their supermarket brand, loyalty was also being tested by soaring food prices. Over two-thirds (68%) said they had switched from branded goods to supermarket own-label to save on food costs – up from 49% in 2021, a 19 percentage point increase – rising to 75% of Millennials. 61% have swapped their usual branded goods for branded value lines, while 68% are sticking to supermarket own-label, and will only trade up to branded goods if the branded items are on offer or discounted.
“Increasingly the shelf-edge is becoming the battleground where shopper loyalty is either won or lost,” said Peter Ward, Country Manager for UK & Ireland at Pricer. “Eager to keep down the price of spiralling food bills, our research shows 83% of UK shoppers will now compare prices at the shelf-edge to keep the cost of groceries down – up 21 percentage points since 2021, before the cost-of-living crisis took hold.”
Ward concluded: “Giving consumers access to real-time pricing and promotions information, served digitally to them at the shelf-edge, not only helps customers feel supported in their increasingly price-conscious buying missions but can also help retailers showcase the efforts they are going to in order to keep prices low and support shoppers by offering the best prices or deals across their sales channels.”
NAM Implications:
- Shopping around and seeking same/better quality via discounters…
- …have to be two key drivers emerging from three years of Lockdown fall-out?
- 17.5% inflation simply nailed it in place.
- i.e. unwise to anticipate any significant return to the good/bad old days of non-discerning shopping.
- Savvy consumers that have survived are now super-savvy.
- Ignore at your peril…
