Shoppers actively seek value as cost-of-living crisis squeeze household budgets

Shoppers actively seek value as cost-of-living crisis squeeze household budgets

November 16, 2023
Cindy Panzera

Highlights from Circana’s 2023 Shifting Shopper Behaviours Report

New insights shared during Circana’s State of the Industry 2023 online seminar revealed how skyrocketing inflation, consecutive interest rate hikes, and rising energy and petrol costs have shaped how Australian consumers are navigating the current cost-of-living crisis.

According to Circana, almost every Australian is ‘somewhat or extremely concerned’ about the effects of inflation (93%), and the cost of living is hitting hard. At the time of publication, Australia was subject to a tenth consecutive interest rate hike.

Almost three in four shoppers said they were concerned about the cost of general household bills (72%) and food and groceries (77%), while around half were worried about the cost of petrol (54%) and their rent or mortgage payments (46%).

As a result of these concerns, value is now overwhelmingly behind why Australians are changing brands. Seven in 10 are now likely to make unplanned purchases after seeing products on promotion or discounted (68%) or switch to a new brand if it offers new features or benefits that appeal (69%). Four in ten (80%) now ‘like to stock up when products are on sale’ and two-thirds believe that retailer/own-label products are a good alternative to branded products.

Aussies want great prices and will try new products, services, brands or retailers for better value

The report revealed that value for money is the primary driver of shopping behaviour for over four in 10 Australians. While they’ll pay more in some categories, many are switching brands or seeking promotions for essentials. In fact, perceived value has driven 56% of Australians to a new store or brand in the last three months, while supply chain issues have also contributed to the three-in-five who have faced stock-out issues when shopping for groceries.

Despite inflationary pressures, sustainability still matters to all generations

The cost-of-living crisis is inadvertently forcing many Australians to think more sustainably especially as soaring energy prices force a review of household energy consumption and practices.

More than half (53%) are willing to pay more to purchase from a purpose-led business with almost one in five willing to pay over 10% more. This rises to over seven in 10 Gen Z’s who would pay higher prices for products from companies that align with their purpose and core beliefs.

The importance of a strong omni-channel strategy

The report highlighted how critical it is to synchronise your data and your omni-channel customer experience. Gone are the days of looking at each channel independently. In 2023, it’s all about an integrated lens on how the same shopper uniquely uses each channel on their disruptive path to purchase.

Circana hosted its State of the Industry event: Exploring the Future of FMCG Retail, online event on Wednesday, 15 November 2023. The three-hour-long event included expert speakers from across Australia and New Zealand who provided in-depth analysis into the state of FMCG. Over 3,000 participants registered to attend.

Click here for more information on the event

Circana is an Associate Member of the Drinks Association 


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