Everybody needs to eat, but rising food prices may cause consumers to change their shopping habits—and limit their discretionary spending—to put food on the table. In Nielsen’s Inflation Impact Online Survey 2013 report, 85 percent of all global respondents say that higher costs impact their choice of grocery products. For Ireland, however, the effects of the tough recession remain on people’s minds and will likely continue driving the direction of their shopping carts.
Two-thirds of Irish respondents (66%) indicate they cannot afford a rise in food prices without making difficult choices elsewhere (ranking 18 out of 58 countries surveyed). To counterbalance an increase in prices, Irish consumers say they would price hunt more in-store, take advantage of deals by stocking up, reduce the number of shopping trips and amount spent per trip, plus shop more in discount stores and look for deals online.
A key measure of buying power is spending flexibility, or the elasticity in the household budget to afford a rise in food prices without having to make difficult spending choices elsewhere. In Ireland, 61 percent indicate, in the past year, they have only had enough money for shelter, food and basics (versus global average of 44%, Europe average of 52%). Just under one third of Irish respondents (31%) say in the past year they were able to live comfortably and bought some things just because they liked them. Only 9 percent say they were able to spend freely (versus a global average of 14% and a Europe average of 11%), indicating the Irish household budget is still under pressure.
How Can Retailers Reach Shoppers with More Limited Budgets?
Irish consumers are making trade-offs. While many plan to buy fewer indulgences—such as alcohol, convenience food, soft drinks and confectionery—shoppers will still buy stables. Dairy products (78%), fresh fruit and vegetables (64%), meat and poultry (67%), bread and bakery goods (68%), packaged foods (68%) and fish and seafood (58%) will remain in consumer’s carts.
However, shoppers will search for better deals on these goods. To find the best prices, the majority of Irish respondents say they’re willing to try new brands—56 percent indicate they would experiment with new brands. In addition, value-driven private-label brands have a potential advantage as consumers become more discerning and lower-priced alternatives proliferate. Forty-seven percent of Irish respondents say they would buy more private label if food prices increased, compared with only 11 percent saying they would buy more national brands.
For additional insights about how Irish consumers are coping with inflation, click here.