Thursday, July 25, 2024

Rising cost of living affecting behaviour

Australia’s rising cost of living is impacting consumer spending, according to new research by consumer insights business Toluna.

The increased costs of groceries, in particular, is forcing shoppers to make changes to their weekly shop. These changes include dropping their favourite brands in favour of generic ones, shopping around to find the best deals, and buying in bulk in order to save money.

The findings are from Toluna’s Global Consumer Barometer Study. The regular index is said to tap into a community panel of 40+ million members providing accurate and timely information on the world’s current perceptions. The latest research surveyed 1,000 respondents in Australia between 23-29 March 2022.

Price hikes impacting grocery shop  

According to the survey, the rising cost of living is having an impact on the way 63% of Australians are spending their money. The increased cost of groceries is causing the most disruption, with 80% of Australians stating they’re being impacted by the rising cost of grocery items.

Aussie shoppers have particularly noticed the rising cost of fresh food (79%), as well as frozen food (62%), tea and coffee (62%), dry pantry food such as biscuits, pasta, etc (60%), household cleaning items (59%), bakery goods (59%), health and beauty products (52%), soft drinks (48%), pet care (46%), and alcohol (43%).

Over coming months, shoppers plan to change their shopping behaviours to help combat grocery price hikes, such as:

  • Changing the brands they normally buy – 29%
  • Buying more generic brands – 28%
  • Shopping around in search of value – 27%
  • Switching supermarkets to find a cheaper alternative – 25%
  • Shopping more often to get the best deals – 25%
  • Changing the amount of snacks purchased – 24%
  • Buy in bulk – 23%

When it comes to purchasing decisions at the supermarket, price is by far the most important factor for the majority of Aussie shoppers, with brand loyalty nearing the bottom of the list:

  • Price – 72%
  • Quality – 68%
  • Health – 62%
  • Favourite brand – 59%
  • Sustainability – 58%
  • On-promotion – 54%

With the cost of living expected to remain high, 50% of Australians expect to be spending more on groceries for the next three months.

Tightening the purse strings 

“As we emerge from the pandemic, the rising cost of living is now one of the biggest issues for Australians,” says Sej Patel, Country Director, Toluna, Australia & New Zealand.

“Our research shows that Aussies are noticing price increases across a number of categories, and are changing their behaviours as way of trying to combat this.”

In addition to the rising cost of groceries, Australians are also being impacted by price changes in other areas. When it comes budgeting, Aussies said the first things they would forego in order to save money would include eating out (32%) and ordering takeaway (28%), followed by overseas travel (22%), spending on premium brand products (21%), going to bars & pubs (18%), and going to the cinema (17%).

With energy costs also impacting finances, Australians are planning to review their energy consumption in order to slash energy bills over the coming months. Over half (51%) will be turning lights off whenever possible, while around a third (35%) plan to take shorter showers to reduce water usage.

“Understanding today’s consumer is critical, and businesses will do well to ensure that communication with customers over the coming months largely focuses on price and value for money,” says Mr Patel. “It’s important that businesses evolve the way they position and market themselves in a way that aligns with current consumer sentiment.”

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