The UK’s vote to leave the EU could lead to some to some significant changes in consumer buying behaviour in the grocery sector in the months ahead.
According to a recent consumer study by Nielsen 37% of respondents reported that they plan on changing the place they buy most of their groceries. The winners according to the article are expected to be discounters while support for local producers is expected to increase with 31% with respondents saying they plan on buying more British products.
The same report has highlighted that 64% of shoppers believe there will be a negative impact to the British economy in the short term with just 16% expecting it to have a positive impact. Meanwhile, 67% of shoppers think Brexit will mean a rise in grocery prices, whilst only 2% think they’ll go down.
Commenting on the impact on the grocery market, Sophie Jones, Nielsen’s Senior UK Shopper Research Manager, said: “Short term volatility is to be expected. We know shoppers – even since the recession – have held onto conservative spending habits. This is likely to be reinforced more heavily in the short term”
Kantar has looked at historical trends in the grocery market to assess how consumers might react to Brexit. In the past shoppers switched to own label, increasing volume deals by branded suppliers in a bid to protect share. Retailers have continued to invest in own brand over the last number of years with Tesco launching its farm brands range to compete with the discounters. Waitrose launched Waitrose 1 a premium range of products. Volume promotions including multi buys have being removed in favour of price cutting across all retailers in the UK. It is more likely that this strategy will continue as shoppers are more conscious of reducing food waste.
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