Amidst easing inflation, consumers have begun adjusting their grocery shopping habits, sparking interest among supermarket bosses ahead of the festive season.
- Recent trends indicate a shift towards premium brands as inflationary pressures lessen, a stark contrast to previous years of bargain hunting.
- Upscale retailers report significant sales increases, yet discount supermarkets like Lidl maintain strong market shares, highlighting diverse consumer spending.
- Interest in premium own-label goods grows, with more shoppers choosing gourmet and niche food products over budget options.
- Retailers adapt by expanding premium offerings and on-the-go meals, observing changes in consumer dining preferences.
Easing inflationary pressures have prompted consumers to alter their grocery shopping behaviours, a change that supermarket executives are keenly observing as Christmas approaches. In recent months, premium and own-brand product categories have seen notable growth, drawing shoppers who are gradually acclimating to less stringent economic conditions. According to Simon Roberts of Sainsbury’s, premium own-brand products are now included in nearly two-thirds of significant purchases, a reflection of evolving consumer preferences.
Kantar data supports this trend, revealing a 16% year-on-year increase in premium own-label sales, while value own-label options saw a decline. Nearly echoing 2021’s rush for affordable alternatives amidst rising food prices, this shift signifies a renewed willingness to spend on quality, as inflation eases from March’s 17.5% to 2.3% in October.
However, while upmarket retailers such as M&S and Ocado report significant sales growth—12.4% and 15.9%, respectively—consumer desire for value remains firm, as evidenced by Lidl’s record market share achievements. This dual attraction to luxury and value indicates that while some consumers are prepared to pay more, others continue to seek cost-effective options, balancing the market dynamically.
Giles Hurley from Aldi UK notes the growing trend of customers choosing high-end items like Wagyu steak and artisan cheeses, affirming a shift towards premium grocery lines as cost-of-living pressures ease. This move is corroborated by Asda and Waitrose, both adopting strategies to enhance their luxury offerings and attract these consumers. Kantar’s Fraser McKevitt highlights a narrowing gap between branded and own-label choices, though the past years’ price increases remain embedded in many product categories.
According to the Office for National Statistics, despite these shifts, food store volumes saw a slight decline in October. This has raised questions about whether consumers are dining out more often. Retail advisor Katharine Shipley points out a growing inclination towards spontaneous dining experiences, a trend that has prompted supermarkets like M&S and Waitrose to broaden their ready-to-eat selections.
Retailers that align their strategies with this blend of premium and value offerings are positioned to thrive as consumers recalibrate their spending amidst easing inflation.
