Hard-up consumers cut back on household goods
Cash-strapped shoppers are buying fewer household goods as prices continue to rise.
While value sales of household goods have risen 2.6% year-on-year, volume sales have dipped 1.2%, according to a new report from SymphonyIRI Group [36 w/e 1 September 2012]. Analysts said consumers were using fewer household products, were trading down to cheaper own-label lines, and purchasing more multi-purpose lines.
The report - Is Economic Uncertainty Affecting FMCG Sales? - also stated that competition from discounters and pound-style shops meant that even an increase in promotional activity over the past year – with the volume of household goods sold on deal up three percentage points to 59% – had not been able to stave off the volume decline.
Shoppers were also cutting back on some food purchases, with sales of frozen food down 2.1%. People were stocking up less, indicating a return to a ‘buy it when I need it’ approach to shopping, said SymphonyIRI strategic insight director Tim Eales.
“As prices rise for most grocery items, shoppers are making savings where they can to enable them to afford their weekly shopping,” he added. “Shoppers have become smarter too. They are buying less and buying more wisely, leveraging multiple sources of information and channels to control their grocery basket cost.”
SymphonyIRI advised retailers and manufacturers to be brave about innovation, which it said would be crucial to driving sales. Household manufacturers, in particular, need to review their brand propositions for saliency and value in the face of continued pressure on shoppers, added Eales.