Shoppers’ coping strategies

Save money and stay
at home

At the start of 2022, the economy and markets worldwide were expected to pick up again, the predictions for businesses and the sentiment of shoppers were positive. While COVID-19 has somehow become a part of our daily lives, the geopolitical crisis and the resulting inflation have now resurrected consumers’ worries – their sentiment has dimmed, they are once again retreating to their secure home environment, adopting a new frugality. Large purchases have been put on hold, households are restricting their energy usage, also using their car to a lesser extent. Shoppers’ will resort to multiple strategies to keep household spending in check.

Though FMCG sales are still estimated to be higher than pre-COVID, shoppers will shift budgets to cope with high inflation rates, either changing product or brand categories within their preferred channel, or switch retailers. Groceries are very top of mind when it comes to worrying about price increases: over half of European shoppers are concerned and plan to change their buying shoppers are concerned and plan to change their buying behavior accordingly. The dynamics will vary per category: from cutting meat altogether to up-trading in instant coffee.

Groceries are very top of mind when it comes to worrying about price increases: over half of European shoppers are concerned and plan to change their buying shoppers are concerned and plan to change their buying behavior accordingly.

The dynamics will vary per category: from cutting meat altogether to up-trading in instant coffee.

After groceries, out-of-home entertainment and consumption are cited as the second category where shoppers – especially the affected and the concerned – will most likely change their behaviors due to price increases. As a result, businesses that already took a blow during the pandemic, including restaurants, cinemas etc., will suffer.

General coping strategies

Source: GfK, Behavior Change survey EU-15 n=7,855 April 2022

Conscious purchasing and consumption of food

Which strategy changes will shoppers adopt when it comes to everyday goods?

This is one of the main questions we asked both shoppers and FMCG businesses.

Not surprisingly, both groups agree on the top three behavior changes, which are: check prices (much) more, search or wait for promotions, and keep the total amount of the shopping basket low.

FMCG coping strategies

Source: GfK, Behavior Change survey EU-15 n=7,855 April 2022 & GfK business survey April n=260

However, whereas businesses expect shoppers to switch to a cheaper retailer (82%) or from a premium to a cheaper brand (72%), shoppers want to make better use of their food, waste less and cook more at home, before they switch to cheaper a brand or a cheaper retailer (both at 37%).

Constraining indulgence

More conscious purchasing including the search for lower prices and promotions, will inevitably lead to categories dropping out of the basket – especially when subject to high impulse purchasing and low promotion, for example confectionary or sweet biscuits and cakes.

The specific categories highly in danger of losing out are those perceived as a luxury, especially alcoholic beverages, confectionery, and cosmetics.

Whereas the concerned will first concentrate on crossing these perceived luxury products as well as meat off their list, staple foods are by no means a safe category: As the affected will need to cut down on general “daily” food, they intend to save on fresh and staple foods, (non-alcoholic) drinks and home care.

The particular coping strategy depends very much on the individual product category, ranging from buying less (e. g. confectionary) or even discontinue to buy (frozen foods/meals) to down-trading, so choosing a cheaper product or waiting for promotions (home care). Coping strategies such as stockpiling or trying to shop elsewhere are less prominent options for shoppers.

Key categories for behavior change

Top shopper strategies and main category

Sources: GfK, Behavior Change survey EU-15 n=7,855 April 2022

Price is not the only choice driver

With inflation rising, price is a growing driver of behavior changes, even among crisis resistant buyers. But it does not automatically overrule everything else.

Asked about the criteria that are becoming more influential for their household decisions, shoppers first stress the importance of healthy ingredients, natural ingredients, and local, regional products – aspects, that businesses agree, are highly important.

Influencing trends: shopper and business view

Source: GfK, Behavior Change survey EU-15 n=7,855 April 2022 & GfK business survey April n=260

Whereas the industry rates eco-packaging and convenience as influential for shoppers’ buying decisions, shoppers themselves have stronger feelings about waste reduction – less packaging and better use of food –, quality and country of origin.

Shoppers will not sacrifice everything for the sake of price nor relinquish their principles, but rather employ different strategies for different products including down-trading, waiting for promotions or switching to a discounter.

Taking a closer look at the five top choice drivers for both Western and Eastern Europe, shoppers rate healthy ingredients by far as the most important criterion, expecting first and foremost no artificial additives, low sugar and no genetically modified ingredients.

Naturally healthy is clearly a crisis-resistant choice driver and while businesses feel that they are on top of aspects such as safety and natural ingredients, shoppers do not seem to be too convinced – definitely an opportunity for FMCG to re-evaluate, invest in and promote.

Less meat: Good for the body, the wallet – and the environment

Shoppers continue to be health-conscious, which is, to some extent, a consequence of the COVID-19 pandemic. In an effort to live a healthier lifestyle, people pay more attention to a healthy diet and exercise regularly, especially in Northern European countries and the Netherlands. And people track key health parameters: Sales of wearables consequently increased by +10% in 2021, especially of devices with more sophisticated tracking features including oxygen level and sleep monitoring.

In control of a healthier and more sustainable lifestyle, consumers are also cutting down on their meat consumption. On average, 35% of European households consist of at least one person following a flexitarian diet, 7% include at least one vegetarian, and 4% at least one vegan. Animal-friendly and plant-based products are becoming more and more popular, with 1 in 3 Europeans and even half of the Dutch population having already bought a meat replacement product in the past year

and more popular, with 1 in 3 Europeans and even half of the Dutch population having already bought a meat replacement product in the past year

Inflation is accelerating this trend as cutting down on meat consumption also has a strong savings effect. Meat / fish is a top 5 category when it comes to shoppers planning adaptative behaviors. At 35%, the coping strategy most mentioned is simply buying less.

Will green become a victim of inflation?

As inflation and insecurity increase, purchasing and consumption habits are changing dynamically. Compared to last year, the group of concerned shoppers in Europe – shifting from resistant – has grown across the board by up to +10%, obviously affecting shopping behavior.

Whereas up to 2022 eco-active behavior had been growing fast – see GfK’s global sustainability study “Who Cares, Who Does?” –, economic and budget concerns are now threatening to affect the green momentum, especially across Eastern Europe. Affordability represents the major hurdle for those shoppers, who want to shop sustainably, but find it hard to follow through.

Eco-active shopper growth path

Source: GfK/Europanel/Kantar WCWD 2021

At the same time, current green shoppers are not likely to down-trade on their principles and in some countries like Germany, climate change is still the main worry, outweighing economic and safety concerns.

Notwithstanding, certain sustainable product features are deemed more worthy than others, above all natural ingredients, followed by eco-friendly packaging, production and transportation, i.e., short distances. Three times as many shoppers are willing to pay (premium) for natural as compared to organic products, with the latter being rather driven by crisis resistant shoppers – and 16% of shoppers dismiss paying for green features at all.

Climate neutral, currently being trended by the FMCG industry e. g. in Germany, has not yet caught on as a premium feature. Arguably it is less tangible and eye-catching than for example reduced packaging.

Nevertheless, doing good and shopping right is not dispensable, not even for affected shoppers, which provides opportunities for the FMCG industry to offer creative, affordable products and programs.

less tangible and eye-catching than for example reduced packaging.

Nevertheless, doing good and shopping right is not dispensable, not even for affected shoppers, which provides opportunities for the FMCG industry to offer creative, affordable products and programs.

Shoppers have the intention to make better use of food leftovers and reduce food waste. Not surprisingly, waste reduction initiatives are trending as they carry the promise of sustainability and savings, not only on food, but consequently on energy, water, waste, production etc.

The best example is the app “Too Good To Go”, which generates >170 million impressions in Germany in half a year’s time among the affected.

Green features worth a premium

Source: GfK ConsumerPanel, Harmonized Statements, EU-14 MAT ‘21

A further look at the digital profile of different crisis types might provide some ideas on how and where to reach and activate target shoppers: Whereas the resistant are interested in smart finance and lifestyle leisure sites, the affected will look for deals and opportunities to save money, e. g. food waste – and potential new jobs. Interestingly, the open petition platform change.org is also highly in use by the affected, evidencing their interest in - and need for – inclusivity and community-led change.

Crisis types: digital usage profile

Source: GfK Digital Usage Profiler Germany Sept ´21 / Feb ´22