European, US and Asian consumers are returning to the “save-shopping” patterns of the 1970s and 1980s as inflation squeezes budgets for groceries and household goods, research has shown.
Data group IRI said households were returning to measures such as preparing packed lunches, buying stale food at cheap prices, limiting their alcohol consumption and visiting several supermarkets to secure the cheapest deals.
The changes in the way people shop for household items are hurting sales growth for consumer goods and encouraging supermarkets to own their own brands.
The study follows evidence that people were cutting back on larger items like clothing earlier in the year as the economic outlook clouded over.
Growth across the consumer goods category has halved to 1.5 percent in 2022, from 3 percent last year, according to sales data from IRI, which covers 14 key global markets. Alcohol sales in stores are declining, along with consumer spending on household products.
In Europe, supermarket own brands, which gave way to branded goods during the acute phase of the Covid-19 pandemic, are returning to pre-pandemic levels. They now account for 36 percent of consumer goods sales, up from 34 percent in May.
So-called private label products are making inroads even into areas like baby food, where parents have traditionally stayed true to well-known brand names, said Ananda Roy, senior vice president at IRI.
The success of private label is partly due to the growth of discounters, which have far more market share than they did in the recession that followed the 2008 financial crisis, Roy said.
“The growth in private label that we’re seeing now is mostly in staple foods. That’s because we need to see if we can get a good deal at Aldis and Lidls – people now have to go to Aldi to buy butter and cheese,” he said.
Their rise poses a particular challenge for small and medium-sized branded food manufacturers, he said.
“We assume that in the first half of 2023 these manufacturers . . . will trigger a price war as they will desperately try to maintain volumes,” he said.
Alcohol sales in stores are down 6.7 percent year-on-year so far in 2022, Roy said. The decline was partly due to a return to pubs and bars as coronavirus restrictions were lifted but has accelerated, suggesting tight budgets are also coming into play.
Alcohol sales in the important summer season are “not nearly as high as in previous years,” Roy said. “Alcohol consumption has gone down, and that’s quite significant.”