Value is becoming more important to Australian grocery shoppers than simply finding the lowest price – and that shift is exposing a growing trust problem for brands.
Focus Insights frames this shift through its Value Equation framework – Price, Proof, Control and Purpose – a lens the agency uses to explain what actually earns a product a place in the trolley today.
“Price still matters, but it’s no longer the whole story,” says Focus Insights CEO Deane Hubball. “Shoppers are weighing it against proof the product delivers, whether they feel in control of the decision, and whether the brand’s actions match what it says it stands for. Shrinkflation sits right at the centre of that – it hits proof and control at the same time.”
The 2026 Australian Grocery Shopper Report, commissioned annually by Focus Insights, found that 85 per cent of respondents had noticed shrinkflation, with consumers increasingly questioning how brands manage rising costs and communicate product changes.
When asked what matters when shopping, overall price remains important to about six in 10 shoppers. But price is increasingly being weighed against factors including taste, quality and whether a product delivers genuine value.
Consumers, says Hubball, are no longer simply looking for “the cheapest, nastiest one”.
That makes shrinkflation particularly risky for brands that reduce product size rather than increase prices to offset higher costs.
“Shrinkflation has become a trust issue,” says Hubball. “You have got 60 per cent saying they do not believe that companies are being transparent.”
Shoppers expect brands to be upfront about changes to product or portion sizes, he says: “Don’t just try and sneak it in.”
Focus asked consumers whether they would prefer a brand to reduce the number of biscuits in a packet or increase the price. This year, 59 per cent said they would prefer the product to remain the same size.
“So they sort of get it; they’re not happy about it. But it is like they are saying ‘Stop messing with my favourites’.”
That response matters because changing the size of a familiar product can disrupt more than a shopper’s perception of value; it can break an established purchasing habit.
“If it is something you buy out of habit or one of your favourite brands, what happens is your trust and transparency really get hit.”
One in two surveyed said that if their favourite products were reduced in size, they would start looking for better-value alternatives. One in three said they would probably buy the product less often. One in five consumers said they would stop buying the product altogether.
“You are just giving your competitor a free kick by doing that because you’re breaking a long habitual cycle,” said Hubball.
Hubball will join Blair Triplett, founder and CEO of branding agency Believe You Me, to co-host industry networking seminars in Melbourne and Sydney next month, diving deep into the mindset of Australian grocery shoppers and explaining the practical implications for grocery brands, retailers, sales, marketing and category teams. You can find out more about this event here.
The trust problem runs deeper
Blair Triplett, founder and CEO of Believe You Me, says the research findings reveal a larger challenge around the relationship between brands and consumers.
“One of the key things is this evolving disconnect between trust built up over time and a brand realising its true potential. Whereas, traditionally, if something goes wrong, you can mitigate it by way of a pubic relations campaign to rectify it; when shrinkflation comes into play, it is not so easy to fix, because it is not a quick fix from a supply chain perspective and from a consumer perspective, and therefore you are eroding trust.”
Triplett warns that when a brand’s actions no longer reflect the values consumers have bought into, the resulting trust gap can constrain growth and weaken loyalty.
“So you are either going to start to incrementally go downwards, or you’re going to struggle to retain those brand loyalists that have always stuck with you. A lot of brands out there are experiencing this sort of issue right now.”
The issue, he says, extends beyond Australia.
“We find the same thing whether we’re working in Melbourne or New Zealand or Shanghai, Kolkata in India or Jeddah in Saudi Arabia: Value, trust, authenticity are absolutely non-negotiable, and I think consumers are increasingly seeing those that claim authenticity without the depth of trust and the actual hygiene factors that go to building that engagement and that trust over time.”
Triplett describes this scenario as the impact of the “whole product-and-brand notion”.
“AI and new social tools are increasingly placing product at the forefront of search, but brand is really the emotional engagement that consumers seek, and they look for trust and confidence in a brand,” he explains.
The challenge for brands is to maintain differentiation when consumers have more tools to compare products, prices, and promotions.
“That is where the issue is starting to come to the fore at the moment: Brands are increasingly looking the same, but those that look differentiated yet somehow connected or anchored back into their respective category can only do so and build based upon trust. Otherwise, you really are playing a race-to-the-bottom sort of commoditised game, and that doesn’t end well.”
The promotion paradox
The value equation is also being reshaped by shoppers’ growing awareness of promotional cycles.
Nine in 10 consumers say promotions influence their purchasing decisions, while 57 per cent say they “almost always” influence what they buy.
“More than one in two are saying they are really promotion-driven. But the paradox is that repeating deep discounts on a two-weekly, three-weekly, four-weekly cycle really damages this full-price value. So, 67 per cent of people are agreeing to wait until the next discount rather than to pay the full price.”
That can undermine the perceived value of a product at its normal price.
“We have this promotional paradox where if a retailer runs a 50-per-cent off promotion, there would be a huge uplift in sales, but we wouldn’t replicate that for another six months. So consumers would go, ‘Wow, let’s go buy this and pantry stock’. But that is happening less as shoppers understand promotional cycles and are less likely to pantry stock, even if discounts are 50 per cent or more.”
“This sort of value equation is getting really muddied in the promotional paradox we’re seeing.”
In-store still dominates grocery shopping
Despite the growth of digital retail, the physical supermarket remains the preferred grocery channel for most Australian shoppers.
Focus found that 79 per cent of consumers prefer to shop for groceries in-store, while 13 per cent prefer click and collect. Only 8 per cent prefer online shopping with home or office delivery.
Those who prefer online shopping point to convenience, time savings, the ability to shop at any time and avoiding checkout queues.
But the barriers to greater online adoption remain significant. Consumers cite the enjoyment of shopping in-store, the ability to inspect fresh produce for quality, delivery and service fees, and concerns about unwanted substitutions when products are unavailable.
Private label earns more respect
The changing value equation is also reflected in attitudes towards supermarket own brands.
About half of consumers say manufacturer brands give them greater confidence in quality. Emotional connections and established trust remain important differentiators.
But private label is increasingly moving beyond its traditional role as the budget option.
Sixty-nine per cent of respondents believe own brands are now just as good as manufacturer brands and help them save money. More than half – 56 per cent – say buying private label makes them feel like a smarter shopper.
“They are not just at the whim of what the retailer is putting in front of them at eye level, but they are making these conscious decisions,” says Hubball.
For grocery brands and retailers, the pair conclude, the implication is that value can no longer be reduced to a price point.
- Other topics to be discussed at this month’s forum include the slowly growing role of AI in Australians’ grocery shopping journeys; the dynamic of consumers mission-shopping across multiple retailers and why brands must not skimp on research and branding strategies.
