Inflation and Consumer Spending: What You Need to Know
Most of us thought that this year we were going to see a downward trend for inflation especially for key everyday products. However, with the recent surge in bird flu causing fluctuations in egg prices and tariffs from the US to major global countries, international commotion, and other factors, this situation might persist for some time. Inflation isnβt merely a rise in prices; itβs also altering consumer shopping habits, preferences, and the timing and locations of purchases. Brands that fail to adapt risk losing their market share and traction at retail.
π Category Trade Downs - Shoppers are trading from premium to private label in some categories, impacting competitive positioning.
π° Price Sensitivity is Higher Than Ever - Even loyal shoppers rethink their purchases when prices fluctuate too much.
π¦ Bulk and Value Packaging are Winning - Consumers are willing to spend more upfront to save long-term. Retailers are also favoring brands that meet value-conscious shopper needs.
π Client Success: A premium beverage company I worked with was facing declining sales due to inflationary pressures. We conducted a deep dive into Numerator panel data, identifying that their core shoppers weren't leaving the category - just shifting to multi-pack purchases in club stores. By adjusting their promotional strategy, they engaged lost consumers and increased overall basket size.
π‘ Takeaway: Understanding category shifts is critical - brands that adapt price, pack size, and promotional cadence will thrive in this environment. Retailers also need insights on price and promotional effectiveness. If you brand isn't telling this story to your key partners, your competition is.
If you need help navigating these trends for your brand or business, let's chat. Let's break it down together and have a data-backed pricing and promotional plan that will keep your brand ahead of the curve. ββSchedule a Callβ.ββββββ