Price sensitivity is driving more and more shoppers to private labels, according to new research. At the same time, more than a fifth of consumers say that sustainability matters less to them than it used to, as those items are often priced at a premium.
New research from Simon-Kucher has revealed price sensitivity is driving a growing demand for quality, and a sharp rise in private label purchases across key markets. Between 55% and 66% of respondents across all countries state that price has become even more important, particularly in the UK, US, and Spain.
In the UK, shoppers were at the forefront of this trend. A 66% majority of consumers said price had become more important to them, while just 4% said it mattered less in their grocery and drugstore purchasing over the last year – even as inflation slowed. Those figures were only matched by respondents in the US.
Quality has also risen in importance for most shoppers. Higher-quality items can also be seen as improved value, as they will often out-last cheaper products, meaning shoppers can end up saving by having to buy fewer replacements. On that front, however, UK shoppers were behind the curve. While 45% of US shoppers, and 37% of German consumers said quality was now more important to their purchases, that fell to 36%, while 9% said it was less important.
UK shoppers look to be finding other ways to save – and their shifting attitudes may have alarming implications for those who had hinged sustainability on ‘voting with your wallet’. While the importance of sustainability to US consumers has grown in 35% of cases (falling in 12%), Europe seems to be going in the opposite direction, with UK shoppers among those leading the shift.
When asked how their regular grocery and drugstore purchases had changed in the last year, 28% said they felt sustainability had become more important. But 20% said they felt it was now even less important to them. This was still behind France and the Netherlands, where sentiment was net-negative – but it suggests that the continued insistence that consumers should pay premiums for the privilege of products that don’t choke ocean birds or cause wildfires.
This contradicts a growing number of celebratory reports since the pandemic, which had noted that consumers in markets like the UK, US and Australia had finally reached a ‘tipping point’, where the majority would no longer be willing to engage with products that had negative impacts on the world. Buying into the sentiment that had trended since the turn of the century, that consumers could change the world through their purchasing power, the overriding sentiment of these studies was that it would now be a matter of time before companies had to change their ways – and those that did not would face an uncertain future. That is probably due some revision now.