Shopping and Pricing - Household Budgeting and Impact of the Recession
NCA research shows focus on finding cheaper ways of living but warning signal that consumers shopping around less
6 January 2010
The number of consumers shopping around has dropped from 75% to 67%, according to the National Consumer Agency's most recent market research, carried out by Amárach Research.
The research also showed that convenience as a determining factor in where to shop has begun to creep up, from 13% to 17% while price, still the most important influencing factor, has fallen back slightly from 70% to 65%.
However, the report also demonstrated that almost two thirds (63%) of Irish consumers are actively seeking out cheaper ways of living and almost three quarters (74%) confirmed that the current economic situation has focused them on thinking carefully about what and when they buy.
The research identifies pressure on household incomes, with 53% of respondents declaring that their income had decreased a little or a lot; 69% confirming that they are trying to buy fewer things and 67% putting off buying large spend items until the current situation improves.
However, almost three in five stated that their household expenditure has either remained the same or gone up. Despite this, Irish consumers remain upbeat, with 67% confirming they are enjoying their life as much as ever and 69% viewing the recession as a good opportunity to pick up bargains in the sales.
Ann Fitzgerald, Chief Executive of the NCA, said: "The past 18 months has seen radical shifts in consumer purchasing behaviour and, particularly in the grocery sector, we have seen very positive outcomes for consumers as competition has intensified driven by consumer demands for value.
"The research shows that consumers continue to seek out value, particularly in the grocery sector, but it also demonstrates that overall, fewer are shopping around. This we find worrying because if that trend continues and we fall back into old habits, becoming complacent in our shopping behaviour, we can expect retailers to take advantage resulting in less competition and higher prices."
Grocery shopping habits
A total of 55% of grocery shoppers have changed their behaviour since the beginning of the year - a slight increase on the previous research carried out.
The main changes include cutting back on treats for the family which has increased by 14% to 56%. The proportion of those buying less continues to climb, with almost half of shoppers (46%) saying they now buy less.
Seven in 10 Irish consumers claim to be aware of the prices of everyday goods such as milk, bread and petrol. Those responsible for the main shop are buying more own brand goods than in previous waves - with 38% of the main grocery shop now consisting of own brand goods.
However, the greatest change is in the number of shoppers who are beginning to take advantage of special offers - up 15%.
Over half (54%) admit they actively seek out special offers. However, when asked, over 3 in 4 of those responsible for the main grocery shop would prefer to see supermarkets offering more long term lower prices.
Only 13% of consumers who are responsible for the main grocery shop believe that they know how promotions and special offers are funded.
However, almost two in five believe that it is through lower prices and that the retailers make no profit. When asked if they were aware that retailers sometimes sell items at a loss in order to entice customers into the stores, 38% said yes.
Ms Fitzgerald said: "The NCA has long been an advocate for the introduction of long term price cuts by the retailers, rather than price promotions and special offers which can often lack transparency. It is clear that our view is matched by consumers who would prefer lower prices in the longer term as they don't know how, in many cases, special offers are funded."
Impact of recession
The research explored how consumers are changing their behaviour as a result of the recession:
- Some 82% of all consumers are now budgeting for household expenses
- 61% of consumers prefer to switch between brands of goods rather than go without them at all
- Over half are seeking out alternative ways to socialise that are less expensive
- 53% are also holding off on planning holidays until things improve in the economy
A third more consumers than previously are now collecting and using coupons and roughly the same proportion are now more likely to use loyalty scheme points when making purchases. 35% more consumers are cooking at home from scratch than before.
Almost a third of consumers believe they are spending less on groceries overall. 26% are more likely to plan the weekly shop in advance while 24% are buying more own label/private label goods.
As a result of the recession more consumers are bargain hunting when buying groceries - 40% say they are doing this more. Over a third of consumers say they are shopping more discount stores such as Aldi, Lidl. The same proportion maintains they are spreading their shop across a number of stores now.
Learn more
Download the report (MS Word, 519KB)
Download a presentation of the report's main findings (Powerpoint, 1.3MB)