Australians are buying less as grocery price rises bite into household budgets, according to new research by NielsenIQ.
The research shows that 80 per cent of shoppers believe their usual weekly grocery run costs more than it did six months ago. Data backs this up, with the average price per grocery item increasing 6 per cent versus last year and the average cost per meal up by $1.28 during the past year.
Consumers have been using various strategies to manage their grocery budgets, with almost half (44 per cent) saying they will wait until their preferred products are on promotion and 29 per cent saying they will buy whatever brand has a promo.
In addition, the number of grocery items per shopping trip has dropped as higher prices make up for the reduced volume in a relatively flat growth environment.
“People are buying fewer items to try and keep costs static,” said Megan Treston, MD at NielsenIQ, Pacific.
She explained that while inflation is ramping up and consumers are feeling it, it is crucial to understand that not everyone is affected the same way, and every response is different.
“Understanding and meeting the new needs of these various demographics and consumer groups will be critical in the next six to 12 months,” warned Treston.
Online shopping for groceries has also increased, growing 24 per cent in 12 months to June this year. Online grocery shopping now accounts for 11 per cent of all grocery dollars spent in the country, compared to 9 per cent last year.
As the country prepares for continued retail transformation – one size does not fit all anymore – consumers have now adapted to shopping online, with one in three households now partaking.
The research also revealed that one out of every three Australians has concerns about their ability to meet daily expenses over the next six months. Ongoing caution in consumer behaviours will accelerate for key groups.
“Strategies must evolve to help mitigate rising costs, cater to new consumer needs and lead industry change by embracing new technology and methods. Balancing price and promotions and developing an Omni-shopper strategy will be critical for brand and retailer success in the back end of 2022,” concluded Treston.
