Despite price-sensitivity starting to fade among UK shoppers as inflation continues to fall, own-label is set to win the long-term loyalty of shoppers – even beyond the cost-of-living crisis – as consumers who traded down stick to value lines, the latest research from Pricer, the leading in-store automation and communication solutions, reveals.
With the latest data from Deloitte suggesting consumer confidence hit the highest level in two years in the first quarter of 2024, rising 6.5 percentage points year-on-year and driven by improving household disposable incomes, it suggested that hopes for the UK economy may have ‘turned a corner’ after a year of stagnation. Indeed, original research of over 1,000 UK shoppers by Pricer showed that 81% of UK said they were price conscious when shopping, down -11 percentage points compared to 2023 when 92% said they were highly sensitive to prices.
However, while price sensitivity among UK shoppers has seen a marked fall year-on-year, indicating a rising level of confidence among consumers compared to 2023, the number of customers displaying price-conscious buying behaviours is still +22 percentage points higher than in 2021 before the cost-of-living crisis, when 59% said they were price conscious. This, Pricer suggests, implies there is still some way to go in bringing levels of price sensitivity among UK shoppers down to pre-cost-of-living crisis levels.
And this continuing heightened awareness of pricing has prompted more than six in ten (63%) to switched from branded goods to supermarket own label to save on food costs during the last 12months, while a further 58% have swapped their usual branded goods for branded value lines, rising to 71% of Millennials.
Even when the cost-of-living starts to ease, consumers price-savvy shopping habits look set to stay. Over a third (36%) plan to continue to shop in the same cautious way they do now even after cost-of-living pressures subside and a further 35% intend to remain economical with grocery shopping, even if they have more disposable income. Just 6% would go back to buying branded goods across their entire shop, while a further 9% said they would go back to the branded goods they used to buy, but only for special occasions.
A quarter (25%) say they will stick to buying value lines as they are happy with the quality, while a further 22% will stick to buying value lines as they don’t want to go back to paying more for branded goods.
Perter Ward, UK Country Manager at Pricer, commented: “Our research shows a real stickiness in customer loyalty when it comes to own-label, with our poll suggesting that even if they start to feel flusher, UK shoppers will stick with own label, rather than trading back up to the brands they may once have bought. In short, levels of price sensitivity maybe falling from a high base, but it’s a behavioural trend we expect to see remain in the long-term.”
“With 80% of shoppers we surveyed saying that retailers should be doing more to ensure pricing are implemented as quickly as possible to help them get the best deals, automation at the shelf-edge can help retailers deliver store- and estate-wide pricing and promotions updates in real-time,” Ward concluded.
