Consumers choose quality over value online despite cost-of-living crisis

Over the last six months, online sales at budget retailers tumbled 16% year on year, despite rising energy bills and prices, according to the latest data from the IMRG-Capgemini online sales index.

In comparison, sales at mid-market online retailers fell just 5%, while premium sales fell 9%.

For the month of July, mid-market sales rose 4%, bucking the trend of a flight to value in the face of the cost-of-living crunch.

Fluctuations in average basket value and both mid-market and premium levels indicated that discounting has been used to boost sales – something budget retailers do not have the margins to do.

The rise in average basket values for mid-market goods between January (£106) and July (£146) suggests some shoppers are unable to let go of higher-quality items, so are compromising by downgrading to mid-market in order to fit in with their new budget constraints.

Capgemini commerce senior manager for customer transformation Simon Binge said: “With mounting economic pressures and very little positive news on the horizon, it’s telling that UK consumers are opting for quality compared to price in the value equation. 

“While there are signs of trading down, consumers are still unwilling to compromise on quality and are being helped by discounting in higher price points. It remains to be seen, however, whether this behaviour – and retail promotional activity – survive the potential worsening of economic conditions in autumn and beyond.”