UK shoppers move downmarket for their groceries

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The latest research from GI Insight has found that 36% of UK consumers have gone downmarket with their grocery shopping and switched to value supermarkets for a significant portion of their food purchases, in an effort to economise as the recession has dragged on.

The study also found that, now that the economic outlook is improving, only 10% of UK consumers plan to move back ‘upmarket’ within the next year, representing a net loss for higher-end supermarkets of 26% in the long term. A similar study conducted by GI Insight in May found that a net total of 21% of shoppers had moved downmarket and planned to stay there. These latest results indicate that, as the UK continues to face a difficult economic climate, more consumers who have moved to less costly alternatives are now beginning to see this as a long-term solution.

However, shoppers are clearly starting to loosen the purse strings a little in some areas as 15% of respondents said they had already started buying quality brands again, even though they are more expensive.

The survey found high levels of long-term slippage from premium to value among women (30%) and the 25 to 34-year-old age bracket (also 30%). Consumers in the North East and Wales represented the greatest level of lasting slippage (42% and 41% respectively). In contrast, the over-55s represent the lowest long-term slippage (19%), but given their more stable financial circumstances – empty-nesters, who have probably paid off their mortgage – they are least likely to have switched to value alternatives in the first place.

When it comes to brands, 18 to 24-year-olds and Londoners topped the table with 26% and 24% respectively saying they have started buying quality brands again, even though they are more expensive.

Andy Wood, Managing Director, GI Insight, comments: “It seems that consumers are not ready to return to their normal shopping habits until the UK economy is much more stable – if at all. Low-end retailers have made real inroads over the past 18 months and it has really shaken up the grocery market.

“Economic recovery could be several months away so supermarkets have some hard work ahead of them, especially given the fight for share of customer pocket at the moment. But this presents supermarkets and brands with an opportunity both to win back lapsed customers and retain those won during tough times.

“Marketers need to start reassessing their strategies in readiness for a recovering economy. It is critical that businesses start looking now at how to position themselves and implement pro-active marketing strategies ready for when the country emerges from recession, rather than waiting until it actually happens. Those that don’t act now will get left behind when business is again booming.”

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