Just like that, September is here!
We hope you enjoyed your Summer so far... but it's not over just yet.
The impact of inflation grows
Grocery prices have hit yet another record high, with inflation growing +11.6% in the latest Kantar read (4 weeks to 7th August).
The impact on the average household is huge, our weekly shop grows by an average £10.25. This means we are each expected to pay an extra £533 over the next year.
We are continuing to see coping mechanisms at play, in particular:
Switching to cheaper stores - Lidl is the fastest-growing supermarket.
Switching to cheaper products - own label value ranges grew +19.7%.
Cutting back on discretionary categories - 47% of people claim to have cut back on alcohol, 45% on cakes and biscuits.
Researching deals as a way to avoid sacrificing quality - Google searches for "specials this week" have grown +60% year on year globally.
Retailers pull back on promotions
Even in times of financial stability, Brits love a bargain.
95% of us like to show off a good deal, whilst only 75% will brag after spending a lot of money. This is a key reason why promotions are such an important part of our supermarket landscape.
It is normally our go-to coping mechanism when we need to save money.
But in recent years, retailers have been cutting back promotions to compete with the every day prices of value retailers, particularly Aldi and Lidl.
This has resulted in the amount we buy on deal dropping by 25% since 2019.
Tesco and Sainsbury's have seen the most dramatic drop in promotions, with both retailers communicating 'Aldi Price Match' across the shopper journey.
Tesco also communicates 'Low Prices Every Day' in areas of the store that compete with other value stores such as Home Bargains.
Sainsbury's have shifted their focus towards their 'Price Lock' messaging.
There are a lot of upsides to retailers implementing EDLP, such as cost savings, less waste, and less planning needed by retailers. Yet, the sales impact for highly promotional categories proves difficult to offset.
Want to know how important promotions are to your category?
Check out my blog post: 5 things you should know before you plan your next promotion.
What's in your lunchbox? 🥪
Families have started to send their kids back to school.
Now is a key moment for food & drink brands to get in lunch boxes!
There is a growing interest in a vegan or vegetarian diet among children.
According to a BBC Good Food Survey, 8% of kids aged 5 to 16 are vegan and 13% are vegetarian. As a result, Vegetarian products have appeared in 5.5 million lunchboxes.
As shoppers look for ways to save even more money, it will be a challenging time for many brands and retailers.
If there is anything we can do to help you or your business - get in touch!
Stay safe, well and positive.
Ella.
Check out the newsletter archives and sign up here to get the latest insight in your inbox.
Comments