Cutting down on hospitality and non-essential expenses
In addition to the price increase for groceries, almost eighty per cent of the survey participants experienced a sharp incline in prices in the hospitality industry. Consequently, more than half find themselves spending less, in cafés, restaurants and hotels. Boomers in particular are cutting down on eating out.
Another important cost-saving category is that of non-essential products which purchase can be deferred: home furnishing products, clothing, and electronics. A small majority of consumers have indicated their vast reduction or complete discontinuation of purchasing non-essentials.
Less expenditure on home furnishing products, clothing and electronics
Hartendorf: 'Retailers of home furnishing products, clothing, and electronics have undoubtedly noticed a drop in consumer spending. And the looming recession means that, for the time being, they cannot expect a major increase in demand. Specifically in the hospitality industry, it seems that the pre-corona heydays will not be returning anytime soon. However, for certain hospitality businesses, a reduced hospitality landscape may offer new opportunities. We may see a return of the creativity we saw during the lockdowns, with menus for home delivery and takeaway options.’
How have you changed your buying behaviour?
Saving when shopping
How do consumers try to save on their shopping expenditure? For their day-to-day shopping, participants opt for the offers (67 per cent) and for larger pack sizes (sixty per cent). Almost sixty per cent consider, more often, to not buy a product, or actually leave it on the shelf. 62 per cent of the survey participants more often choose a retailer own brand to save money. If we take a closer look at the income groups, the survey reveals, as expected, that consumers with an income up to €30,000 are more likely to leave products on the shelves, whilst those in the next income group, up to €50,000, are more likely to select alternatives.
Another way to cut down on grocery costs is to forego buying more expensive, fresh, sustainable, and healthier products. Among all of the survey participants, 38 per cent reach less for fresh, durable and healthy. Of those consumers who bought these products frequently in the past, half of them now buy sustainable products, such as organic food, less often. A quarter forego fresh products to save money and almost a quarter leave healthy products to gather dust on the shelves.
Reduced loyalty towards specific retailers
Search of the best prices has led to a decline in loyalty towards certain retailers. 44 Per cent of the participants to this survey indicated that they go to a different or to several other stores - for groceries as well as non-essential products. Second-hand items are an alternative to cut the costs for more than a quarter of the consumers.
Hartendorf: ‘More conscious spending behaviour provide retailers with opportunities to win new customers. Now that customers are comparing prices more than before, having the right value proposition is important. And if customers manage to find you, a new or improved loyalty program may help win them over.'
Speciality shops experiencing revenue decrease
How are the baker, the vegetable shopkeeper, the butcher, the florist, and the liquor store doing? After a rise in popularity during the coronapandemic, speciality shops witnessed a decline in the number of visitors over the course of the last few months. The consumers who usually shopped at speciality stores (65 per cent), now have almost half say that they either buy less or not at all from these stores. Only some consumers make an exception for special occasions such as Christmas.
Fewer Christmas presents
What is the effect of a reduction in purchasing power on Christmas spending? 45 Per cent plan to spend less on Christmas or to do no Christmas shopping at all. Savings are specifically focused towards cutting down on Christmas presents. Furthermore, consumers are also saving on eating out, Christmas decorations, and the Christmas dinner. In respect of the Christmas tree, only 35 per cent expect to save on its costs.
A final noteworthy finding is that the youngest group of participants actually want to unpack this Christmas in a bigger fashion. More than half want to celebrate this festive day in a bigger way, although only two-thirds revealed that they hold the necessary funds to do so. Hartendorf: 'Last winter's lockdown measures meant that Christmas was celebrated on a smaller scale. According to our survey, it is Generation Z who feel the strongest need to make up for that. The "catch-up spending", or “revenge spending”, hold for some retailers and businesses within the hospitality industry a possible additional source of income in an uncertain period.'
This survey was carried out in collaboration with retail experts Q&A.
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