UK shoppers are heading into the Golden Quarter with tighter budgets but a willingness to change where and what they buy, creating an opportunity for grocery and convenience retailers to capture spending through value, quality and the right rewards.
Research from Epsilon found that 71% of consumers plan to cut back on non-essential spending, while 68% are actively looking for lower prices. Yet groceries are emerging as one of the categories where shoppers are most open to switching, with 60% saying they may try different brands during the peak shopping season.
For convenience retailers, the findings point to a more selective shopper rather than one who has stopped spending altogether.
According to the new report published today by Epsilon, UK consumers are planning to spend £17.9bn on gifts and personal purchases, the equivalent of £334 each on average, during the peak shopping season between Black Friday in October and the post-Christmas sales in January.
Despite UK ad spend predicted to pass £50bn this year, growing at roughly seven times the pace of GDP, audiences are not growing at the same pace, according to the ‘Advertising under Pressure: into the Golden Quarter and beyond’ report. This is creating a highly competitive media landscape in which it’s far harder for marketers to get in front of the right audiences, who are themselves making much more considered purchases.
Key report findings:
- The cautious consumer – cost-of-living pressures mean that shoppers are curating spend rather than cutting back completely. 71% are planning to cut back on non-essentials, while 68% look for lower prices and 63% delay bigger purchases.
- Treats are protected – while they are being more selective, shoppers are protecting what’s important to them. Almost half (48%) will still indulge in the occasional treat, while more than one in three will prioritise quality over quantity.
- Brand curious – consumers also see cost pressures as an opportunity to switch up and try something new this Golden Quarter. Groceries (60%) are proving to be an unlikely popular choice compared to other categories including fashion, homeware, beauty and electronics. Consistently good prices (47%), trust in a brand (42%), and rewards (35%) are reasons cited for staying loyal to brands.
- Broader discovery – consumers spread discovery across search engines, retailer sites, in-store, social media and price comparison sites. Despite the breadth, 82% of marketers are further consolidating spend into the major platforms, a trend which correlated with 55% of marketers who feel platforms give too little data for cross-channel campaigns.
- Retailer trust – just over half (56%) of consumers feel more confident in a product promoted by a retailer they shop at. But it’s younger generations, Gen Z and Millenials, who have grown up online with dupes and products of questionable provenance, that value a retailer’s online and instore presence most highly.
“It’s never been more important for brands to show up consistently,” comments Holly Williams, VP Client Services & Growth at Epsilon.
“There’s a risk that many see the peak buying season as a series of individual events, with Black Friday, Amazon Prime Day and so on as fixed dates in the calendar. But with UK audiences remaining flat, it’s more important than ever to maintain a presence across the whole buying period to build familiarity and trust.”