Inflation is now a central factor affecting consumer behavior, especially in grocery and CPG sectors. As prices rise, shoppers are increasingly focused on finding budget-friendly alternatives, seeking out discounts, and prioritizing affordability over brand loyalty. This report explores how inflation is reshaping grocery shopping trends and offers insights into how brands can remain competitive in this changing landscape.
Businesses must adapt to these changing consumer behaviors to stay relevant and retain customers in this new economic climate. This report, based on a survey of over 2,000 consumers and marketing professionals, sheds light on the trends reshaping the industry and offers insights into how brands can maintain their foothold.
Key Takeaways from the Report
1. Consumer Sentiment: Priorities and Pressures
Across income levels, rising grocery prices are a top concern for consumers. With the cost of essential items like food and beverages continuing to climb, 88% of shoppers report frustration with price increases across several categories, including groceries, gas, and dining out.
Grocery Frustration:
86% of consumers are frustrated with overall grocery costs, especially the prices of food and beverages (80%).
Even affluent households earning $100K+ express concern, with 79% feeling the impact of rising prices.
Expert Insight:
Beth Johnson, Director of Client Strategy, recommends brands focus on providing personalized offers and relevant discounts to address price sensitivity, as this will help strengthen customer loyalty.
2. Shopper Strategies: Budgeting Tactics
Shoppers are adapting their habits to stretch their dollars further. Some of the key behavioral changes include:
41% of consumers stock up during sales.
37% buy fewer items or switch to less expensive brands.
35% switch from name brands to private-label store brands.
34% rely more on coupons and discounts.
Expert Insight:
Michelle Garcia, Director of Client Strategy for Consumer Packaged Goods, notes that brands should position themselves as a value-driven alternative, offering premium options while also catering to budget-conscious shoppers.
3. Decision Drivers: What Influences Shopping Choices
While price is crucial, convenience and experience also play significant roles in where consumers choose to shop:
68% of shoppers prioritize convenience and proximity to their homes.
32% of consumers, especially younger generations like Gen Z and millennials, value engaging shopping experiences.
Retailers looking to attract these consumers must balance convenience with personalized, memorable experiences. Strategies like loyalty programs, personalized discounts, and in-store technologies, such as interactive video screens, can significantly enhance the customer experience.
Expert Insight:
Michael Mathias, Chief Growth Officer, advises retailers to bridge the gap between consumer expectations and current marketing investments by focusing on data-driven personalization strategies.
4. What Shoppers Want: Meeting Expectations
Today’s consumers expect more from their grocery stores and brands, including convenience, personalized deals, and locally sourced products:
59% of consumers prefer stores that understand their buying habits and consistently offer relevant deals.
57% favor stores that feature locally produced goods.
55% appreciate personalized discounts and feel valued when they receive tailored offers.
Expert Insight:
Hans Fischmann, Vice President and General Manager, emphasizes that while 55% of shoppers remain loyal to their favorite stores, 45% are willing to switch for better savings. Brands need to innovate continuously and align their strategies with evolving consumer demands to stay competitive.
Source: https://www.rrd.com/resources/research-report/2024-cpg-and-grocery-consumer-report
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