Research suggests food shoppers jittery post-referendum
© Tim Scrivener/REX/Shutterstock Shoppers will look to cut their food bills by buying cheaper options or switching supermarkets once the effects of the EU referendum result start to bite, according to research by Nielsen.
The market research company has published analysis which suggests that 64% of shoppers believe Brexit will negatively impact the British economy in the short term and this could lead to a change in buying habits.
Two-thirds of shoppers say they are expecting a rise in grocery prices and 41% say they will change their spending habits in order to reduce their household bills.
See also: Retailers expected to source more British food post-Brexit
This could involve switching to cheaper grocery brands or starting to shop at a different supermarket (37%).
“Price-led retailers are those most likely to benefit from shoppers changing retailer or brands to save money, which includes the discounters, Aldi and Lidl,” said Sophie Jones, Nielsen’s senior UK shopper research manager.
Shopping habits
- 67% of shoppers think Brexit will mean a rise in grocery prices, only 2% think they’ll go down
- 37% plan to change the supermarket where they currently buy most of their groceries from
- 41% of shoppers are planning to change their spending habits to save on household expenses and the younger the age group the more likely they are to do this
“To limit any potential impact, retailers need to ensure they have the right price and promotional strategies in place to avoid people switching as well as reviewing their product ranges to ensure categories are protected in the short term.”
Ms Jones said the trigger to any change in spending would be an increase in food inflation or changes in disposable household income, which might occur in 2017.
Until then, the current supermarket price war was expected to continue, which would mitigate any immediate upward pressure on prices.
On a more positive note, the research shows that 31% plan to buy more British groceries, while 4% plan to buy less.
Fraser McKivitt of Kantar Worldpanel said they were yet to identify any changes in the grocery market as a result of the vote and he was not expecting a big consumer response.
The 2008 recession had showed that grocery sales were resilient, as while shoppers might cut back their spending on electricals, clothes and leisure, they still had to eat.
However, with an estimated 40% of the food consumed sourced from overseas, any long-term change in exchange rates might threaten the current period of cheaper groceries.
“Historically, higher prices have led to consumers looking for less expensive alternatives such as own-label products, seeking out brands on promotion or visiting cheaper retailers.”
Source: Nielsen
