Let’s be honest, we’ve all felt it. That little wince at the supermarket till, the double-take at the fuel pump, or the sigh when the energy bill lands.
The UK consumer has been navigating a relentless tide of rising costs over the past few years, and it’s certainly left its mark on spending habits. Between May 2021 and May 2024, UK consumer prices increased by a total of 20.8%. This cumulative effect means households face a much higher cost of living than before the crisis, even as inflation rates have eased.
Gone are the days when a spontaneous splurge felt relatively guilt-free. Now, every penny is under scrutiny, and for good reason, when essentials like food, energy, and even mortgages are chewing up a larger slice of household budgets. Unsurprisingly, this has led to a noticeable shift from impulsive purchases to more considered, value-driven decisions.
In 2024, 52% of consumers reported cutting their non-essential spending, with only 3% able to increase it. Eating out (72%), clothing (62%), and takeaways (58%) were the three most common non-essential cutbacks reported in Q1 2024 (KPMG UK, April 2024). Almost two-thirds (65%) of households intended to cut back across most, if not all, areas of their spending in the financial year leading to April 2024, up from 52% a year prior (Grant Thornton & Retail Economics).
75% of shoppers say they have had to change their grocery shopping behaviour due to the cost-of-living crisis. (Clear Channel, March 2024). 40% of shoppers are buying more own brand/value produce and over a third (36%) of consumers are using loyalty schemes more (KPMG UK, April 2024; Grant Thornton).
It’s a tricky landscape for brands. What was once a reliable consumer base might now be a moving target, adapting their priorities and seeking different kinds of value. So, how do businesses navigate these choppy waters and continue to connect with their audience? This is where the magic of market can make all the difference.
Market research is not just about crunching numbers, it’s about understanding the “why” behind changing consumer behaviours. For example, are consumers opting for larger, less frequent supermarket shops to budget better? Are they only buying brands they love when they’re on promotion? Have they changed the retailers they are visiting?
So why should brands be considering market research at such a challenging time? Whether looking at the “what” (quantitative) or the “why” (qualitative), robust market research can provide invaluable insights that will help brands understand their customers and make better strategic decisions.
Understand the “new normal” value equation – What does “value” truly mean to consumers now? Is it the lowest price, or a combination of quality, durability, and a brand’s ethical stance? Research can pinpoint these evolving definitions.
Identify shifting priorities – As budgets tighten, some categories might take a hit while others surprisingly hold steady or even grow. Market research helps identify these shifts, allowing brands to reallocate resources and focus on what consumers are truly prioritising.
Pinpoint emerging needs – The challenges of rising costs can also spark new needs. Perhaps there’s a greater demand for affordable, convenient solutions, or for products that help consumers save money in the long run (think energy-efficient appliances). Market research can uncover these untapped opportunities.
Refine messaging and offers – Knowing why consumers are making certain choices allows brands to tailor their communication. Highlighting cost-saving benefits, emphasising value, or offering flexible payment options can resonate far more effectively than traditional marketing during these times.
Stay agile and responsive – The economic landscape is dynamic. Ongoing market research provides continuous feedback, allowing brands to quickly adapt their strategies and remain relevant in the face of evolving consumer sentiment.
For focused and ambitious brands, market research isn’t just a nice-to-have, it’s a strategic imperative. It empowers brands to move beyond assumptions and make informed decisions, ensuring they’re not just surviving, but thoughtfully adapting and even thriving in this challenging yet fascinating period of UK consumer spending. The brands that listen best will undoubtedly be the ones that navigate these rising costs most effectively.
If you’re interested in market research for your brand but don’t know where to start, get in touch here