A new survey has found that four out of five UK consumers are considering switching to value or discount retailers due to the growing cost-of-living crunch.
New data compiled exclusively for Retail Week by Walnut Unlimited has found that 82% of UK consumers are likely to switch their shopping to value and discount retailers across essential categories as rampant inflation and surging energy prices deepen the cost-of-living crisis.
Of those shoppers, 80% said they would look to save money on their food shopping by switching to a cheaper grocer.
Walnut Unlimited research director Becky Miles said: “The volume of comms around discounting for supermarkets makes switching to cheaper retailers for grocery shopping a quick win for consumers.”
While the data would suggest that discount grocers like Aldi and Lidl would stand in prime position to snap up market share in this environment, Tesco and Sainsbury’s, in particular, have expanded their Aldi Price Match ranges of late.
After pressure from food poverty campaigner and author Jack Monroe, Asda committed on February 14 to stock its Smart Price and Farm Stores ranges in all 581 food stores and online by March 1 to help customers struggling with surging costs.
But customers aren’t just considering cheaper options for food retail. More than half of respondents (54%) said they are also looking to save money when shopping for clothing, while 40% of health and beauty shoppers are also considering switching to less expensive alternatives.
The data has potentially dire ramifications for UK high streets, many of which are still struggling to bounce back from two years of rolling coronavirus lockdowns and lower-than-average footfall.
The survey found that 81% of all respondents were concerned that rampant inflation would affect their non-essential spending habits.
Some 39% of respondents said they would cut back on discretionary spending on hospitality, 38% on leisure activities and 37% on clothing.
More than 20% of respondents said they would look to cut back on electronics and technology (24%), furniture (22%) and health and beauty (21%).
Walnut Unlimited’s Miles said: “It’s unsurprising that the prevalence of rising living costs is affecting consumer confidence.
“With high levels of concern, retailers will need to work even harder to showcase value perceptions and convince on spend – particularly for higher-ticket items.
“Consumers like to feel in control of their decisions and spend – reducing spend on treats like eating out, days out and the amount of clothes purchased gives them the opportunity to reassume some autonomy over their finances.”
In terms of age demographics, the 45- to 54-year-old bracket was the most concerned about the rising cost of living.
Conversely, both the youngest demographic (18-24) and the oldest (75-plus) were the least concerned.
“We crave certainty. As the future financial landscape is unpredictable, consumers are less likely to act and commit to spending. With some showing more concern than others, retailers need to work hard to reinforce certainty among these [customers],” said Walnut Unlimited’s Miles.
The survey was conducted before the Russian invasion of Ukraine, which has only driven up the international price of oil further and sent commodity prices skyrocketing.
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