Global report shows frugal habits to die hard
Around 78% of people are spending the same or more on food and groceries, according to a global report from Deloitte, while the majority insist changes to their shopping habits are permanent.
The report noted that 52% of shoppers say their shopping habits have changed for the long-term, although most say they are spending as much as they were prior to the financial crisis – due in part to higher prices. And, while retail conditions may be tough,supermarkets should be able to perform well.
“Consumers are gravitating to the grocers,” Tarlok Teji, UK Head of Retail at Deloitte, said. “The increasing number of budget or own-label products has been a winner for the supermarkets who have also taken over from traditional high-street chains as the country’s biggest clothing retailers.”
The recession may have accelerated the pace of change by forcing consumers into taking daily decisions on their spending patterns, but the ‘smart shopper’ has been with us for a while and is here to stay.
Around 59% of people have cut back on daily indulgences such as snacks or coffee, compared with last year, while 60% have reduced the number of impulse purchases they make and 45% say they more regularly seek out vouchers before shopping for food and other groceries. As further evidence of greater spending control, 65% of shoppers say they are more aware of what they spend their money on compared with 12 months ago and 51% buy cheaper or non-branded products.
It is a trend that hasn’t gone un-noticed by the industry with 88% of retailers acknowledging that people are shopping around more this year and becoming less brand loyal. However, whilst it may be assumed that these changes are a temporary response to the downturn, 52% of people say they have changed their shopping habits for the long-term.
“In the immediate future people remain cautious about their spending power, but there is something more fundamental at play here too,” Teji added. “These changes in behaviour have not happened suddenly, they have evolved over a period of time and mostly before the ‘credit crunch’. So talk of a ‘new consumer’ in our view is over done. The digital age has made information available 24/7 and now, anyone with the internet has the ability to research products, prices and opinions and with mobile technology this can be done on the go. This has created an unprecedented level of transparency.”
“(For example) the history of retail in the UK shows the balance of power shifting over decades from the Government, to the manufacturers, to the retailers. And now, it is very much with the smart shopper. Retailers will need to adjust the way they interact with these smart shoppers and serve them.”
The report’s authors advised that retailers needed to adapt quickly and would be left behind if they only focussed on one or two aspects of their business model, with a retuning needed to keep up with all of the consumer trends identified.