dunnhumby Consumer Pulse 2022
As inflation bites, new research reveals dramatic shifts in customer behaviours
A long-looming threat is now an established reality
After months of discussion about the potential consequences of skyrocketing food inflation, people around the world are finding out first-hand that the raw cost of living is now higher than it was 12 months ago – and dramatically so in some locations.
Ever eager to understand the impact of macroeconomic shifts such as these on shopper behaviours, we conducted a survey of almost 10,000 grocery customers across 25 markets in order to find out more about their response to rising inflation. In addition, using data from previous studies, we were able to chart changing behaviour over a year-long period. Here’s what we learned.
We spoke to 18,000 grocery shoppers during the last year, while inflation raged at 40-year highs, and shoppers replied with rage to match. Americans are struggling and changing behaviours to cope, and the grocery sector is once again the main stage on which these changes are playing out.
FINANCIAL CONCERNS
Financial worries – both personal and general – are mounting
One year ago, in a separate piece of research, we asked shoppers around the world to tell us their thoughts on both the state of their national economy, and their own personal finances. At that time, around two-thirds (63%) of those we spoke to said that they felt the economy was weak, while less than half (47%) felt the same way about their own financial situation.
Today, that outlook is far less optimistic. Fully three-quarters (75%) of respondents believe that the economy is “not so good” or “poor”, with concern about their personal finances following suit (57%). The tipping point for economic worry has been hit, with the majority of customers now holding a broadly negative perception about the state of their finances.
PRICE HIKES
More than 9 out of 10 people say that food is now more expensive than a year ago
While there’s still some variation in terms of personal finance perspectives, that’s not the case when it comes to the cost of food. Shoppers hold an almost unanimous belief that they’re paying more for food than they were 12 months ago, with an overwhelming 93% stating that the cost of groceries has risen over the past year. Only 2% believe that food prices have fallen during that time.
Perception of food prices
More expensive than a year ago
Same price as a year ago
Less expensive than a year ago
PERCEPTION VS. REALITY
Shoppers believe that food inflation is higher than it is – but the gap is closing
Asked how much they felt food prices had increased by, the average response was around 27% – significantly higher than the average global rate of inflation at 14%. Nonetheless, while shopper perceptions about the rising cost of food might outstrip the reality, there are clear signs that the two are coming gradually closer together.
In February, another dunnhumby study showed that shoppers felt food prices had increased by some 19% over the past year. That means that the perceived rate of inflation has increased by around 45% between then and now. The actual global rate of food inflation for countries in the study, meanwhile, has risen by 177% during that period. Shoppers may still be overestimating when it comes to rising food prices, but reality is quickly catching up.
February 2022
September 2022
Perceived Food Inflation
Actual Food Inflation
Perceived Food Inflation
Actual Food Inflation
Dr. Feroud Seeparsand Consumer Psychologist, dunnhumby
“Shoppers may still think that food prices have risen by more than they have, but it’s easy to understand why when we look at the global context.”
PERCEPTION VS. REALITY
Reality and perception aren’t always linked
As might be expected, where food prices are rising particularly sharply, perceptions about inflation are significantly higher too. Respondents from Hungary, Chile, Colombia, and Czechia hold some of the strongest opinions about the rate at which the price of food has increased, entirely logical considering that inflation in those countries has been particularly acute.
This correlation doesn’t tell the full story of perception and reality, though. Elsewhere, we see major discrepancies between what shoppers believe and what is really happening – respondents from Brazil, South Africa, and Chile stating that the cost of food has risen by more than it actually has. In Brazil, for instance, shoppers believe inflation to be almost a third (30%) higher than it is in reality.
Perceived Food Inflation
“Notably, there’s a decline in the number of shoppers buying larger pack sizes in spite of the better value they typically offer. The focus for many is clearly on saving as much money as possible in the short-term.”
SEEKING VALUE
Value-seeking strategies continue to gain traction
In response to the tougher economic climate, a growing number of shoppers are now adopting “value-seeking” strategies. With only a fraction (6%) of customers stating that they “don’t pay attention to prices” when shopping, the focus for many is on taking every step that they can to maximise the value of their grocery shop.
Some of the most popular actions include searching online for the best sales (45%, up from 35% in 2021), using coupons or offers on the products they normally buy (52% vs. 42% in 2021), and buying own-label goods when available (34% vs. 30% in 2021). Some shoppers also seem to be becoming increasingly selective, opting to buy certain products only when they’re on sale or are discounted via a coupon (37%).
DINING OUT
Customers are visiting restaurants less and cooking at home more.
% of respondents 'eating at, or from, restaurants less and eating at home more'
September 2021
February 2022
September 2022
TREAT YOURSELF?
Cost-conscious they may be, but shoppers still want treats
While times may be tough, the desire to treat themselves continues to be a critical concern for many customers. Self-care seems to be particularly important, with global shoppers more likely to buy something special for themselves (37%) than for their family (32%). Only in Hungary and Germany does that balance shift – shoppers in those two countries are more likely to put their family first.
Intriguingly, perceptions about inflation appear to have minimal impact on the importance of treats. Special purchases are similarly important to both South African and Finnish shoppers alike, despite the fact that those countries sit at opposite ends of the spectrum when it comes to perceived increases in the price of food.
"Treat purchases hold almost universal appeal to shoppers at the moment. Even in locations where inflation is perceived to be much higher than it is – and perhaps because of that – there’s a sense that customers want to counter the difficulties they’re facing with occasional rewards.”
% Treat Myself & Treat Family
LOYALTY
Loyalty is waning in the face of inflation, with customers likely shopping around for the best deals.
% of customers shopping in the same store
September 2021
February 2022
September 2022
SHIFTING PRIORITIES
Health and sustainability take a backseat to cost in the short-term
As shoppers look to reduce their spend, value-seeking actions like those described above aren’t the only tactics that they’re employing. As well as capitalising on discounts, vouchers, and sales, we also see clear evidence that they’re prepared to make sacrifices when it comes to issues of healthy eating and sustainability as well.
Although many shoppers say that they’re conscious of the environment (43%) and that eating well makes them feel good (39%), support for both of those statements has declined over the past year – considerably so for the first (down from 56% in 2021). Cost almost certainly has a bearing here. More than a quarter say that leading a sustainable (28%) or healthy (26%) lifestyle is now just too expensive to pursue.
Survey methodology
This study explores shopper behaviour and attitudes in Brazil, Canada, France, Germany, Italy, Mexico, Spain, UK, USA, Czechia, Hungary, Norway, Slovakia, Australia, Denmark, Ireland, Japan, Chile, Colombia, Portugal, New Zealand, Finland, Sweden, South Africa and UAE.
The latest survey was carried out in September 2022, with a minimum of 400 shoppers in each market (minimum of 300 shoppers in UAE and South Africa).