The cost of living crisis has drastically impacted consumer shopping habits with more than 60% of customers now actively looking for the lowest price when shopping, according to the 2023 data from IPA TouchPoints. This figure is 11% higher than pre-lockdown in 2020 when 55% said the same.
With annual food inflation still running at a rampant 16.5% in June 2023 – a sizeable drop on the 17.5% recorded in March but still the sixth highest figure recorded since the 2008 financial crash – shoppers are taking it upon themselves to ease the effects of inflation.
What is the role for loyalty in a cost of living crisis?The survey of 3,000 adults across the UK shows 60.9% of shoppers now look for the lowest price and best deals when shopping and that 41.6% search for money-off vouchers (up by 31% since 2020) to lower the cost of their shop.
Financial difficulties have also made consumers significantly less loyal to their preferred brand, the data shows, with half of consumers (52.9%) saying they will gladly switch brands to make use of a coupon (up by 13%). Meanwhile, 42.7% use a range of supermarkets and shops for their weekly groceries in order to get the best prices, up 14% from 37.5% in 2020.
It’s not just spending habits that have been affected by the cost of living crisis, the amount of time consumers spend shopping has dropped too.
As financial burdens increase, halting both our short- and longer-terms plans, it is imperative that brands and their agencies are mindful of these challenges.
Josh Krichefski, IPA
Supermarkets continue to attract the greatest weekly reach of all shopping outlets at 63.6% (although this itself is down 7% since 2020). But the number of shoppers on the high street has fallen by 17% (from 40.5% to 33.6%) since 2020; shopping centre reach has fallen 8% (from 21.0% to 19.3%) and out-of-town retail parks have fallen 3% (from 14.7% to 14.2%). Meanwhile, online shopping has increased slightly since 2020, up by 3% from 49.4% to 50.7%.
TouchPoints also reveals consumers are spending an hour longer at home than they did in pre-lockdown 2020 – with the mean hours spent inside now at 18 hours and 43 minutes a day, up from the 17 hours and 37 minutes a day consumers were at home before.
There is a growing concern among UK consumers that they aren’t able to cope with the current financial pressures, according to the study. More than a third of consumers (37.6%) don’t believe they can cope on their current salary (up by 22% on 2020). For those who are part of the lowest income group this figure rises to 60%.
It’s perhaps no surprise then that the data shows consumers are putting off major life milestones as they wait for the economy to turn back positively. Consumers are deciding to put off career changes in the next 12 months with the number of people planning to move jobs (down 31%), change career (down 37%) and start a new business (down 20%) all significantly lower than at the same time in 2020.
Cost of living crisis: Why it’s better for brands to say nothing at allFor Josh Krichefski, IPA president and CEO, EMEA & UK, GroupM, it’s easy to look at the data and forget the “story” of the people behind them.
“We can see from the latest TouchPoints data the significant impact of the cost of living crisis on consumers’ lives,” he says. “As financial burdens increase, halting both our short- and longer-terms plans, it is imperative that brands and their agencies are mindful of these challenges and work to understand the role we can play in helping to add value to consumers’ lives at this tough time.”