SIXTH SENSE: WHAT EVERY FMCG BRAND NEEDS TO KNOW RIGHT NOW

It is probably true to say that the average UK grocery shopper has always been price-sensitive to some degree.

Many will have interpreted that as seeking out the best offers and biggest discounts. Others by seeking the greatest value for money where quality is concerned.

Now, at a time of raging inflation and spiralling household bills, has there been a change to the grocery multiple eco-system?

Well, if the latest Kantar sales results are to be believed, then yes.

In the 3 months leading up to August 2022, it is clear where sales growth has been most significant. Double digit year-on-year sales increases were reported by both Aldi and Lidl, whilst the primary casualties in reverse were most apparent at both Waitrose and Morrisons.

At a time when we all need to tighten our purse strings, it would be easy to attribute this outcome to changing consumer behaviour. As in; “everything is so expensive now, I need to change how and where I shop.”

But is it all about a conscious and considered consumer economic decision? What about the role for advertising in that shopper’s thought process? Can advertising influence such a change in behaviour?

The evidence would suggest it can.

We looked at the media expenditure by major multiples during the same 3-month period year on year to discover the same correlation between the winners and losers.

It is no coincidence therefore that both Aldi and Lidl are showing significant increases in ad expenditure, whilst both Waitrose and Morrisons experienced significant decreases.

So, yes, the pressures of today’s economic challenges are driving more consumers to chase lower prices, however, we should not ignore the role that advertising investment can play to either maximise our opportunity to gain share or limit the damage of losing share.

On that basis, the battle amongst the multiples for media impressions is going to prove even more competitive than the inevitable retail price war.

 

 

Amy Digweed

Account Director

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