Almost half of consumers will cut back on eating out and switch to supermarket own brands to save money as they face rising food bills.
The data comes from a survey of 2,000 national respondents initiated by Palmer & Harvey (P&H), and follows hot on the heels of last week’s Bank of England warning about a consumer spending squeeze this year as inflation rises and real wages fall.
The P&H-commissioned white paper also predicts that food bills will rise by more than 3% by the end of the year, too.
Martyn Ward, managing director at P&H, says: “Consumers are currently only feeling the thin end of the wedge or rising prices, yet an uncertain political and macroeconomic backdrop means consumers are less optimistic about the future of the economy and are poised to tighten their belts as inflation outstrips wage growth.”
According to the research conducted by Retail Economics, consumers are already feeling the impact of rising prices, as results show that 73% of those questioned agreed that they would prefer to stay at home and cook a meal if they felt personal finances were under pressure, whereas a further 35% would limit spending on recreational activities.
Consumer spending habits could also change the way families approach their weekly food shop, with more than half indicating they would trade down to cheaper own-brand alternatives, whilst 47% would consider switching to a cheaper supermarket altogether.
This trend was especially prevalent in 16-24-year-olds, with two-thirds of respondents suggesting they would happily abandon traditional loyalties.
Ward added: “It will be critical to the success of retailers, wholesalers, and suppliers to rapidly adapt to changing consumer behaviour, as shoppers shift towards own label, cheaper alternatives. Those that quickly grasp the opportunity to evolve their product mix and pricing will be the winners in this challenging environment.”