Returning to Value in a Global Pandemic

The global pandemic continues to bring economic uncertainty resulting in cautious consumer spending. As a result, consumers are seeking enduring value as the change in discretionary income and the economic concerns dent consumer confidence. We are starting to see increasing resurgence of private label products, emphasised spending on necessities, and consumers looking for affordable premium items. 

COVID-19 is promoting cautious spending

Consumers are paying more attention to how they spend their money - focusing on spreading their budgets further and getting the essentials.  The scaricity mindset is also not just impacting their budget, but also what the value in the products they buy; they are looking for flexibility, durability and convenience.

The proportion of consumers who have looked to save money when shopping for food and drink. ²

We are seeing the resurgence of private label

COVID-19 has created the foundation for a private label renaissance. As branded options disappear from shelves due to panic buying and grocery stockpiling, many consumers are reintroduced to private label as an accessible and low price option.

Additionally, as people become less financially confident with the increased risk of recession, consumers are looking to private label as affordable versions of what they once purchased to make their budgets go further.  Important to note is that one in two consumers feel the impact of the pandemic on shopping habits will continue to be felt for at least the next twelve months.³

The proportion of consumers have been buying more private label in the last month as a result of COVID-19. ³

Consumers are adopting a ‘back to basics’ lifestyle

Consumers are adopting a ‘back to basics’ lifestyle foregoing ‘frills and fads’ in favour of simplicity, practicality and versatility. Consumers are also rethinking what’s important to them in the long term.

Consumers are looking for affordable premiumisation

Consumers are still looking for ways to indulge and enjoy quality goods, but without breaking the bank. For example, treating themselves occasionally with indulgent snacks, or premium ready meal kits as opposed to eating out. 

The proportion of consumers purchasing more premium ready meals or indulgent treats to compensate for the reduction of spending in foodservice. ⁷

Opportunities

The ongoing economic uncertainty brought about by COVID-19 will continue to promote cautiousness in spending for some time to come. Consumers will look to get the best value possible for their money. 

Brands need to ensure their products align with consumer needs and priorities. Consumer thinking around value is continuously evolving and does not always mean cheap or low cost. 

We have outlined in this document some key strategies that brands can use to deliver to these evolving needs. It’s key that brands are overtly communicating their products ‘value’ to help consumers when rationalising their spending decisions.