According to the latest Deloitte Consumer Tracker, budget shopping has become a long-lasting effect of the cost-of-living crisis. The report reveals that approximately one-third of consumers are opting for value options, such as purchasing own brands and shopping at cheaper stores. Despite an improvement in UK consumer confidence for three consecutive quarters in Q2, it still remains below its long-term average. This focus on value has prevented an increase in spending on discretionary items, which is typically associated with improving confidence.
While prioritizing value during difficult times is not a new behavior, the cost-of-living crisis has unique characteristics. For example, 44% of consumers actively seek to reduce their home energy consumption to combat rising costs. However, travel demand remains strong, with consumers choosing to spend on holidays despite high ticket prices. This shift towards budget-friendly options and the continuous emphasis on value could potentially become a permanent aspect of the retail landscape.
The Deloitte study, which surveyed 3,387 UK adults, also highlights that consumers have remained consistent in their adoption of coping strategies to manage the cost-of-living crisis, even during events such as public holidays and the King’s Coronation celebrations. Céline Fenech, the consumer insight lead at Deloitte, suggests that consumers are looking to retailers for assistance in managing costs. Around 29% of respondents are hoping to take advantage of discounts and promotions, while 27% plan to utilize loyalty schemes more frequently. Fenech believes that this shift towards budget shopping could have a lasting impact even after the cost-of-living crisis subsides. In order to regain consumer trust, retailers will need to provide transparency on prices and demonstrate the value of their products.
Useful links relevant to the article:
1. Discounters in the UK: Recycling and local shopping
2. UK consumer spending and shopping habits during the pandemic
