In response to recent price hikes, over 40% of UK consumers have changed where they do their weekly shop…
What are supermarkets doing to keep customers happy?
As inflation soars and the cost-of-living crisis rages on, the price of groceries continues to rise. And, worryingly for many, it is budget products that are rising at the highest rate.
What food prices are rising?
Food price inflation is a major cause for concern for supermarket shoppers across the UK. As a result, more and more people are turning to everyday essentials on the lower end of the pricing scale.
However, budget groceries have become 17% more expensive than they were a year ago. This is notably higher than average food and drink inflation, which peaked in summer at 14.5%.
Crucially, though, some budget food and drink products have increased in price at a much more drastic rate. According to research conducted by the Office of National Statistics (ONS), vegetable oil has increased in cost at the highest rate, by an eye-watering 65%.
The prices of some other low-cost food items have also increased faster than the average rate of inflation, including:
- Pasta: 60%
- Tea: 46%
- Bread: 38%
Understandably, this is causing consumers to change their habits as they pursue lower-priced products that will bring down their grocery bill.
Changing consumer habits
Recent research by McKinsey & Company has found that 94% of UK shoppers have experienced an increase in grocery costs. So, they’ve been shopping around for better deals.
Of the people who reported going elsewhere for their weekly food shop, 67% did so to get better value for money, while 52% switched to a supermarket that offered better prices and promotions.
Unsurprisingly, more consumers have been purchasing products with lower price tags – whether they’ve stayed loyal to their supermarket of choice or started shopping elsewhere. As an example, 44% of shoppers have made the switch to cheaper snacks and 42% are buying budget-friendly bread.
What are brands doing to retain customers?
With the sector in such turmoil, grocery retailers are having to up their game to retain and attract customers.
So, what are these brands doing to keep struggling customers happy and, in turn, maintain a healthy top line?
Morrisons
Morrisons have announced an upgrade to their existing loyalty card scheme. Now, My Morrisons users will have more immediate access to deals. With new promotions and discounts that are only available to loyalty card holders, comparisons have been drawn with Tesco’s (highly successful) Clubcard scheme.
Will this be enough for Morrisons to make up lost market share and reclaim their spot in the Big Four?
Asda
Several years behind competitors Tesco and Morrisons, Asda launched their own rewards scheme earlier this year. With the promise of delivering “pounds, not points” to shoppers, Asda Rewards is a scheme that can deliver greater value on their already budget offering.
Iceland
In the week beginning 31st October, Iceland are offering selected frozen ready meals at a penny a piece. Available to online customers as part of the brand’s Save Hot Dinners campaign, the campaign will be running until Friday 4th November and aims to help families who are struggling to put hot meals on the table.
Aldi
As well as offering low-priced products to consumers, Aldi have recently announced a pay rise for workers – the third so far this year. The grocer’s new minimum rate now sits at £11 an hour, meaning that 26,000 of their existing colleagues can expect a pay rise of 50p an hour from January.
This puts it back above rival Lidl as the highest-paying supermarket in the country.
Making your products competitive
Concerned about keeping up with changing consumer behaviour and maintaining product sales?
We’ve noticed a rise in requests for Marketing, Insight, National Account Management and Supply Chain talent with specialised grocery/FMCG experience.
Contact us today for talent that can strengthen your brand’s positioning…
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