The cost-of-living crisis is continuing to cause widespread changes in consumer shopping behaviours in UK groceries – and it won’t be letting up any time soon. But what changes are being made by shoppers and who are the shoppers making them?
These are the big questions for retailers and manufacturers, and new consumer data from IRI has shed light on their answers. We’ve found that on average 50% of UK consumers have changed where they buy their groceries in the last three months due to price hikes.
Younger generations and shoppers in the UK’s West make the biggest changes
Our research has found that over three in 10 people (32%) are now shopping more in discounters, and over one in 10 (11%) are shopping more in convenience stores. This en-masse shift is a crystal clear reflection of inflation’s toll on personal budgets, as non-food inflates faster than any other wholesale department, and fresh grocery prices now increase faster than impulse.
But who is being worst impacted?
Looking at age demographics, while most over 65s have not altered their shopping habits, only 35% of under 24s shop the same way as they did three months ago. And while shoppers in their 40s and 50s were more likely to switch their spending to discounters, those in their 30s and younger saw a bigger shift towards convenience than average.
Students are, unsurprisingly, hardest hit, with 86% adjusting their shopping habits. We also found that students tended to overtrade in switching to convenience stores. Families and people in shared accommodation, on the other hand, are more likely to adjust where they purchase their groceries due to price hikes.
It's also clear that changed shopper behaviour features more heavily in different parts of the UK. We found consumers in Wales, Northern Ireland and the West of England to be changing the location of their regular spend the most nationwide over the past three months.
What can stores and wholesalers do about it?
There’s plenty for retailers and wholesalers to unpack from this new data. And we’ve given you a head start by sharing our main recommendations.
Seeing that discounters are the more likely to pick up switching shoppers, convenience stores should be experimenting with tactics – such as benchmarking pricing and new offers – to rival the appeal of their competition. The priority focus here could be areas with a high student and/or 30s or younger population, where convenience stores can expect to pick up more incremental spend. The same thinking applies to locations in the West of the UK, where we’re seeing more customers making switches.
Both convenience stores and discounters should be considering adjusting their ranges for the more budget conscious younger generations who are more likely to be switching and considering them a viable channel. It should go without saying that the priority should be on range and promotions focused on providing the best value to shoppers.
Wholesalers, on the other hand, should be talking with their customers and highlighting the ranges that most effectively cater to a younger and more price-conscious demographic. Considering the regional differences we’re seeing, wholesalers in the West of the UK specifically may want to offer adjusted ranges or different promotional events in store.
What to do next
We have the expertise, insights and data available to help both Wholesalers and Suppliers alike make the best decisions when it comes to managing range, category mix, pricing and promotional activity.
Contact us today to speak to us about protecting and maximising your revenue and share during the Cost of Living crisis.
Sources
IRI Consumer Research | n: 505 | 05.09.2022
(IRI) SalesOut Wholesale Inflation Tool | Wholesale: Retail | 52WE 31.07.2022 vs YA
