Sponsored: How UK consumers are adapting to a cost of living crisis
There’s a growing cost of living crisis in the UK. In the 12 months leading up to February 2022, prices rose by 6.2%, the fastest in 30 years. And to make matters worse, the Office for Budget Responsibility says that inflation and higher taxes from April mean that households are facing the biggest decrease in living standards since records began.
Given the impact of the rising cost of living, Toluna wanted to understand the sentiments of UK consumers and the actions that they’re taking in response. The Toluna team fielded a survey of 1,037 UK consumers ages 18+ between 11 and 14 March 2022.
Consumers are really feeling the effect of rising costs
Over half of respondents (51%) said that they’re either very or extremely concerned about their personal financial security in light of the current cost of living—an increase of 6% in a matter of just three weeks. Consequently, it should come as no surprise that only 24% of consumers feel confident about spending money over the coming months.
Where are consumers feeling the most impact? Look no further than the grocery store, where 51% of consumers are being impacted by price changes to a moderate or large extent. As a result, they’re expecting to spend a bit more in this area (30%), or even a lot more (14%), over the next three months. While they’re observing higher prices across most grocery aisles, it’s fresh (fruits, vegetables) and chilled foods (dairy, meat) that are hurting consumers’ pocketbooks the most.
Priorities are changing as a result
With the rising cost of essential goods like groceries, it’s natural that consumers are looking for other places to pull back. When asked where they were most likely to spend less, some similar themes rose to the top: eating out (40%), ordering takeaway (39%), and consuming alcohol at bars or pubs (34%).
What other actions might UK consumers take? Forty-three percent of respondents say they expect to purchase fewer premium branded products over the next three months, and 37% are planning to spend more nights in front of the TV in lieu of nights out.
What about the things they won’t do without? As consumers spend less money on food and alcohol outside of the home, they’re unlikely to give up things like drinking alcohol at home, TV/streaming subscriptions, and their mobile phone contracts.
And so, too, are their shopping habits
For nearly half of respondents (49%), price is the top ranked factor when choosing groceries to buy. When asked how their grocery shopping behaviours might evolve over the next three months, the most popular response was that they’d buy more own label products (38%). What other changes will they be making?
• 32% Changing the amount of snacks I buy
• 27% Visit more stores in search of value
• 25% Changing brands
• 25% Changing supermarket
How brands are responding
Toluna has been looking at how consumer brands are responding to the rising cost of living. Here are the top five business challenges that brands solved last week using the Toluna Start platform:
1. Market Understanding: How are buying habits, product usage frequency, and behavioral triggers changing?
2. Market Knowledge: Why are customers shifting their behaviour? Is it price, value, or ESG?
3. Trade-Off Analysis: What are people going to spend more on? They’re spending more on eating in and giving up eating out.
4. Benefits Screening: Which benefits (price, health, sustainability) resonate the most on-pack, on-screen, and in-store?
5. Shelf Test: Test price perception versus competitors and own label.
As the economic landscape continues to evolve, it’s imperative to stay on top of changing consumer sentiment. If you’re looking to transform the way you collect consumer insights, contact Toluna today and start knowing.