Institute of Grocery Distribution data shows that over40% of the population feel that they will be worse off this year than last. It would seem that a slowing of the inflation rate combined with modest decreases in the price of gas and electricity are not enough to offset rising fuel prices, and a lurking fear that redundancy may be just around the corner. The gloom is confirmed by Bord Bia, the Irish Food Board people who regularly monitor consumer sentiment in Britain, Ireland’s largest export market. Their latest survey in the “Feeling the Pinch” series indicated that when asked the question “How well do you think things are going in the British economy these days?” 86% of people answer badly or very badly.
Little surprise therefore that when asked “What one thing will become more important over the next six months?”, 58% of people answered “saving money”. (Source IGD).
Out in the market place we see supermarkets continuing to burnish their value credentials, with offers ranging from money off promotions to vouchers for petrol. The generally quoted figure for goods sold on promotion is close to 50%. Even the more premium grocers have had to jump on the promotional band wagon with Waitrose recently saying that their percentage of goods on promotion had increased in the past year from 17% to 28%.
That said, consumers are not always hell bent on buying the cheapest possible items. When asked which products were worth paying extra for, 54% said they were prepared to spend more for high quality ingredients, 47% for high welfare/ free range, and 41% for locally produced. The percentages dropped to 26% for Fair Trade and well known brands, and 20% for organic products. (Source: IGD).
There are some glimmers of light among the general battening down of the hatches. 2012 is an event packed year for the UK, and a combination of Euro 2012, the Olympics and the Diamond Jubilee may encourage some to splash out. Generally though, consumers will remain wary.
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