While there is a general consensus among Australians that the country is in recession, grocery purchase behaviour is not just about lower prices.
Despite being in the midst of recession, Australians continue to prioritise quality, emphasising the importance of ‘value-for-money’ to consumers. This also explains why many Australians, driven by an ongoing sense of entitlement, are reluctant to make wholesale changes to their grocery product consumption preferences.
With 70 per cent of Australians believing the country is in recession, and a further 37 per cent experiencing a worsening financial situation between October 2008 and April 2009, it is not surprising that ‘lower prices in general’ heavily influence where Australians do most of their grocery shopping.
However, more Australians cite the ‘overall quality of products sold’ as the primary influence on where they shop. Comparatively few felt that habit was a significant influence on where they did most of their shopping. In fact, the quality and quantity of the stores’ private label range was deemed more influential.
At a time when Woolworths and Coles are continually expanding their private label brand lines to help enhance store loyalty, it is interesting that, in response to the downturn, nearly a third of Australians are changing where they shop for food and drink products to save money.
More than one-third also reported trying to be more disciplined by buying from a shopping list without adding things not on the list.
More than two-thirds of Australian respondents (68 per cent) agreed that, given the recent economic downturn, they now wonder more if they are getting value-for-money as a consumer. This could be good news for US retail giant Costco, which is poised to entice Australian consumers with their discount prices and immense product offering when it opens its first Australian store in August 2009.
“This provides opportunities for those industry players who can successfully find the ‘value sweet spot’ whereby the product or service meets or exceeds quality expectations, but at a price that is slightly less than expected,” commented Katrina Diamonon, Datamonitor analyst and report author.
This period of more ‘considered’ spending has created an ideal environment for private label products to flourish. Such offerings, which typically offer shoppers cost savings over famous branded equivalents, appeal to the growing breed of Australian consumers who are seeking ‘more for less’.
Almost one-third of Australian shoppers are routinely buying private label products in an effort to save money, while in the personal care sector, 41 per cent of respondents considered private label grooming/beauty products to be the same or superior to market leading famous brands.
“As shoppers tighten their belts amid declining confidence and an uncertain economic environment, they are now looking carefully at more expensive branded products and questioning why they should pay more for a particular product,” said Diamonon.
Forty-five per cent of Australians are making more of an effort to ‘cook from scratch or with fewer convenience foods’, consistent with a Heinz commissioned study released in April 2009 that found 40 per cent of Australians were eating less take-away compared to three months previously.
“The most notable consumer response to the downturn, at least in terms of grocery products, was the desire to cook more often at home,” said Diamonon.
Australian drinkers have become slightly more value conscious in their at-home alcoholic beverage choices, but generally have not made significant cutbacks in the amount or quality of alcohol they consume, reflecting the relatively robust nature of the alcohol industry, “particularly in countries like Australia where it is strongly embedded in the culture”, added Diamonon.
While purchases of household care products remain inherently price-driven, Australian consumers show an ongoing desire for efficacy led quality.
“The fact that more than half of Australians dislike doing the housework and more than two-thirds want to minimise the time they spend doing housework makes Australians reluctant to trade down when buying many household products,” concluded Diamonon.