More Brits continue to hunt for better deals to cut back on grocery spending as they spotted more examples of “surge pricing” and “shrinkflation”, stares a recent report on consumer spending, saying people are becoming sceptical about the value of supermarket loyalty schemes.
According to latest report by Barclays, more consumers (70 per cent) looked for ways to reduce the cost of the weekly shop last month compared to August (67 per cent). Of this group, 49 per cent were buying budget or own-label goods over branded lines in supermarkets. A further 52 per cent took advantage of multibuy deals, bundle offers and/or buying items in bulk to reduce costs.
Meanwhile, 47 per cent of those surveyed who are cutting back on grocery spending are now using vouchers or loyalty points to obtain money off at the checkout, while 41 per cent are shopping at multiple supermarkets to source a range of deals.
However, the research suggests that many consumers are questioning whether these offers provide the best value for money. Two-thirds of shoppers (67 per cent) believe that supermarkets inflate the regular price advertised for some products so that the promotional prices offered through their loyalty schemes look like a better deal than they really are.
Meanwhile, a higher proportion of consumers (76 per cent) noticed examples of ‘shrinkflation’ in September than in August (71 per cent), with chocolate (48 per cent) remaining the most cited product impacted by this trend.
This comes after 59 per cent said they’ve noticed that some products have changed their packaging in order to disguise a product inside is smaller or weighs less, while 68 per cent stated that supermarkets should put labels on products informing customers when they have shrunk in size/weight without the price being changed.
The research also found that 47 per cent of people have noticed more examples of ‘surge pricing’, where companies raise the prices of products and services during peak times, or when demand is higher. Of those who have spotted this growing trend, 32 per cent have seen an increase in the price of food and drink in pubs and bars during peak times, such as evenings, weekends and during major sports events.
Credit and debit card data from Barclays shows that consumer spending grew 4.2 per cent year-on-year in September – less than the latest CPIH inflation rate of 6.3 per cent but higher than August’s growth figure of 2.8per cent – as the late summer sun boosted in-store spending.
The Rugby World Cup helped drive spending in pubs and bars, yet growth slowed on restaurants and takeaways as consumers began saving money for the festive period.
Spending on essential items grew 4.6 per cent, largely due to an upswing in fuel spend, driven by rising petrol and diesel prices, as well as a 7.0 per cent uplift in spending on groceries.
Esme Harwood, Director at Barclays, commented, “Grocery spending tapered off over the summer, thanks to the long-awaited drop in food price inflation. Worryingly, growth sped up again in September, which could be an early warning sign that food prices may not come down as quickly as we’d hoped.
“Eagle-eyed shoppers have spotted more examples of ‘surge pricing’ and ‘shrinkflation’, and are becoming sceptical about the value of supermarket loyalty schemes. Consumers are also starting to pull back their spending in some non-essential areas so that they can put more money aside for the festive season.”
Jack Meaning, Chief UK Economist at Barclays, added, “Over the last few months, a picture has been building of consumers beginning to pull back on discretionary spending as the cost of living, and monetary tightening from the Bank of England increasingly bite. We’ve seen the warning signs from surveys, and now we see it in the more concrete spending data.
“This suggests the outlook for consumers, and the businesses that rely on them, is weak, even as they finally see their disposable incomes rise faster than inflation. It makes it hard to see anything but a relatively stagnant economy on the horizon.”