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According to a new report from the Institute of Grocery Distribution (IGD), the rise in the cost of essential food items is likely to reach a peak of up to 15% this summer, the highest figure in 20 years, and will last much longer than initially predicted.
This is due to several factors, including the impact of the war in Ukraine, pre-existing supply chain challenges, and limited effectiveness of monetary and fiscal policy.
With shoppers really feeling the pinch, we explore how their shopping behaviour has changed, from making more trips to buying more unhealthy products.
More frequent local shopping trips
With fuel prices at a record high of nearly £2 per litre, shoppers have been making an effort to buy as they go, rather than doing big weekly shops.
Even supermarkets have noticed this trend, as Tesco chief executive Ken Murphy reported, “What we are seeing are higher frequency shopping trips. So, there’s an elevation in the number of shopping trips and we are seeing basket sizes coming down a little bit.”
Moreover, consumers have been turning to their local indies rather than driving out to big superstores as they consider the potential savings versus fuel costs and the wear and tear on their vehicles.
As Mark Kacacry, managing director at Norfolk Deli told Speciality Food, “I was speaking to a customer this morning about how some people look at the price of something in an independent and feel that they could make a 50p saving by getting in their car and driving elsewhere without a thought for the cost of the fuel, wear and tear, not to mention the additional time it takes to make a tiny saving.
“If the rising fuel costs make people think twice about the value of their trip and whether it will cost them more to travel than it will be to shop locally then that could signal a longer-term trend as it’s unlikely that fuel/travel costs will come down dramatically any time soon.”
Buying less healthy food
According to a recent report from the Institute of Practitioners in Advertising (IPA) – which spoke to 3,000 shoppers – consumer awareness around healthy eating has dropped since the start of the year.
In fact, the number of adults preferring to eat healthy or organic food has fallen by almost a third, while those who state they always read the nutrition label before making a purchase has fallen by almost a quarter.
Commenting on the findings, Belinda Beeftink, research director at the IPA, said, “What these new findings appear to show us is that even at the start of the year, with finances tightening, people are having to buy what they can afford rather than having the luxury of choice.”
This data is concerning but provides an opportunity for indie retailers to demonstrate that they can offer healthy, sustainable and local food at better value.
Fidelity Weston, honorary vice president of Pasture for Life, suggested that, “Having access to fruit and vegetables that may not be fit for the supermarket standard could offer good deals, making the most of local gluts all help.”
A reduction in eating out
Research from commerce software business Braze revealed that rising inflation is motivating 82% of UK consumers to cut back on non-essentials, with three in five of the 2,000 Brits surveyed saying they would be reducing spending on takeaways.
With consumers less likely to eat out due to fuel prices and unnecessary spending, could this mean a resurgence of cooking from scratch and premium ready meals that give the illusion of restaurant quality for less?
Andrew Goodacre, CEO of the British Independent Retail Association (Bira), certainly thinks so. He told Speciality Food, “I think local food retailers should focus on marketing ideas such as recipe/menu plans, using their products and ingredients to help consumers make the choice and take away some of the ‘fear’ of cooking a more complex meal.
“Whilst many customers will want value when shopping, I also believe that many will also look to trade up for a better experience, and this is where local speciality retailers have an opportunity.”
Moreover, while it isn’t feasible for all fine food retailers, those with kitchens and/or cafes could repurpose them to create premium ready meals that provide customers with a taste of luxury, but with a much smaller price tag than if they were eating at a restaurant.
Eating less meat
According to a recent consumer survey conducted by The Vegan Society, over a third of shoppers (35%) reported that they are cutting down on meat or ditching it completely in response to the cost-of-living crisis.
In fact, over half (53%) of those surveyed said they would be interested in trying a plant-based diet if it was proven to be more cost-effective than a mainstream diet.
The latest findings follow previous research from the society’s Live Vegan for Less campaign which highlighted that three-quarters of Britons were concerned over the rising cost of food.
With farming charities such as Sustain advocating for eating less but better meat, it seems that shoppers are opting to do just that, and this is where fine food retailers with meat counters can step in. Offering cuts of meat by weight can help customers to only buy what they need, bringing down their food costs.