Four out of every five UK shoppers say that they have noticed price inflation taking place in supermarkets, according to a new study by shopper insights consultancy Shoppercentric.
The Shopper Stock Take Index study found that 26% of shoppers say that they have noticed prices increasing 'a lot', while 56% have 'noticed small increases'.
When asked what they believe the sources of these price increases to be, 54% said that the 'state of the economy' was an influencing factor, while 50% cited Brexit.
Other shoppers cited the currency exchange rate, the rising cost of ingredients, and a growing number of 'greedy' companies.
The study reflects the findings of the recent Kantar Worldpanel market share figures for the UK market found that grocery inflation (for the 12 week period to 28 January 2018) stood at +3.6%, which means that price inflation has persisted in the UK for more than a year. This followed on from a sustained period of price deflation in the UK market, which ran for 30 consecutive periods, from September 2014 to December 2016.
"Retailers and brands must keep a finger on the shopper pulse and appreciate that each customer is now using a range of strategies to cope with increasing pressures on household budgets," said Danielle Pinnington, managing director at Shoppercentric. "Which categories or sectors will suffer most this year is likely to depend on how they react to changing shopper needs."
Changing Habits
Shoppercentric's study also found that while consumers aren't feeling the same 'pinch' that they might have experienced during the recession, they are starting to feel the pressure.
Just one in four shoppers says that they are 'unaffected' by the UK's economic situation, which a considerable proportion (44%) saying they are making changes to how they spend.
This is up from 16% that said that they were changing their shopping habits a year earlier.
The discounters appear to be the main beneficiaries of these changing behaviours; 57% of UK shoppers say that they now use discounter stores for their shopping, which is up 13% on the previous year.
In addition, shoppers are becoming more discretionary with where they spend their money, with 16% of consumers saying they go shopping 'little and often', rather than conduct a big weekly shop. This is up from 11% the previous year.
In addition, four out of five shoppers say they are are now more 'careful to avoid waste'; three quarters say that they 'avoid being tempted to buy things I don’t need', while half say that they are now 'going out of their way to find the best prices'.
Interestingly, three out of five shoppers are now buying more private label where possible 'to keep costs down', according to the study.
Some 30% of shoppers say that they are using online shopping more often, however this is a higher percentage among younger consumers.
More Pressure
"With shoppers picking and choosing between stores for particular items based on their own experience of how well different retailers deliver, there is even greater pressure to differentiate and create memorable in-store experiences," said Pinnington.
"Equally, avoiding or challenging misconceptions based on bad experiences has become more important."
Pinnington suggested that the data shows that shopper loyalty is increasingly becoming an "outdated term. This is not the year to hunker down and hope the storm passes over with limited damage.
"Now is the time to get out and about amongst today’s consumers and shoppers so that marketing strategies resonate with their needs, flexing as those needs change to cope with whatever 2018 throws at them.”
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
