Keep calm and shop on: viewpoints
Vice-president of business development at Mysupermarket.com and director of insights and marketing services at Premier Foods give their views on the post-recession consumer.
- How consumers are coping with a double-dip recession: read the cover story here
- As a retailer, White Stuff has been particularly hard hit by the recession. Read here about how it’s adapting to the changing consumer
- The double-dip recession has also come with a supermarket price war – click here to see how customer data is helping brands get ahead
- The six faces of the post-recession consumer: which one are you?
James Foord
Vice-president of business development at MySupermarket.co.uk (price comparison site)
I think we are seeing a permanent shift in behaviour because it has become fashionable to be savvy, because it is so ingrained and because there are so many ways for customers to get the right information and to have control over what they are spending. It doesn’t matter whether you are an Aldi shopper in Sunderland or a Waitrose shopper in Richmond, everybody is looking to save a few pounds, and that’s another reason why I think this trend is here to stay.
We are seeing more customers reacting to our offer suggestions, and our suggestions to bulk-buy on certain items and buy bigger packs. We send our customers an email with the best offers and suggestions on how to save, and in the past few months we have seen those become more successful. The open rates, the click-throughs and the customers buying these products have dramatically increased.
It has become a kind of badge of honour to say you managed to find a voucher or get a deal. Customers are coming to our website looking for them, and for ways to make an expensive basket cheaper. That is very apparent this year. No one is shy about trading down to basic products, and the recession has gone on so long now that it is fast becoming the way of doing things.
The retailers’ price activity has resulted in a very confusing marketplace. The consumer hears Tesco saying ‘big price drop’, Sainsbury’s saying ‘brand match’ and Asda saying ‘price guarantee’, and is stuck with no idea of where to go. No one is sure who has got the best deal. That is helping us, because people come to our site to find out which retailer truly has the best deals.
We’re seeing the average basket value dropping, even though food inflation is rising. It is almost as if customers are using us to counteract the effects of inflation. They will have £70 and spend only that, and they want to do this not by buying fewer items, but by buying at lower prices.
Consumers are also becoming more promiscuous. They are more willing to go for the retailers that happen to have the best deal that they want that day, or a voucher on our site that they can use. They are becoming a lot less loyal and it is noticeable. The prices are relatively similar at base level, but it tends to be the deals, the loyalty plans and the voucher campaigns that are making the difference.
The other trend we are seeing is that those who we would traditionally call Waitrose and Ocado shoppers – even, to some extent, Sainsbury’s shoppers – are more than willing to make trade-offs in their shopping basket. We see them swapping certain items for lower-quality ranges. We are seeing customers optimising their spend within a store, swapping to basic items on some products so that they can carry on buying the things they know and love.
Nick Steel
Director of insights and marketing services at Premier Foods
We have begun to see over the past few months an acceptance by consumers of the long-term situation we are in. Rather than it being a recession from which we’ll come back, people think the world has changed. It is what it is and it is here to stay.
Consumer confidence is starting to come back. People think that while they’re not suddenly going to have more money in six months’ time, they need to start enjoying their lives. That might be underpinned by the Queen’s Diamond Jubilee, the Olympics and other events this summer.
Habits such as people taking a packed lunch to work are increasing a lot, and we can help with that. For example, our brand Mr Kipling enables people to buy one cake on its own for their lunchbox. It is not necessarily about the price, it is about the utility and making sure there is no waste.
People’s focus on price and value is very clear: households are looking to spend within a fixed budget and that is motivating a lot of behaviour. They are shopping around more, looking for good deals. Instead of buying lots, they buy within a budget and then top it up across more shops. Shopping trips increase to convenience stores closer to home. Over the next six months I don’t think any of these changes in habits will seem like a blip. People will continue to shop in the way they have in the past six months for the next few years.
As time goes on, we see more and more people from the range of economic groups going through the same thing. Those with less money will be shopping to a budget, but it doesn’t mean everyone across the board isn’t looking for value. We see a lot of people looking for quality while still being conscious of the price.
From our point of view, it accentuates the importance of making sure that all the products we produce meet consumers’ needs and make sense for the retailers as well. We need to do things that don’t just work for us, but grow the category as well.
