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How Inflation Changes Consumer Patterns - Business

How Inflation Changes Consumer Patterns – Business

Rise in sales in discount stores, search for the best promotions, second-hand boom, spending cuts… Faced with the inflation that has been hitting Europe for several months, consumers are trying to adapt their habits to preserve their purchasing power as much as possible.

The changes in habits are mainly visible in four areas, here are the ones:

The discounters at the party

The movement is common to all of Europe: less expensive stores, or perceived as such, are currently conquering many new customers, led by Lidl or Aldi. It is to the point that supermarkets considered more expensive like Carrefour are now promoting their discount offer.

Arbitrations and bargains

Another reflex of consumers: a hierarchy of expenses, conscious or not. “Anything that is non-essential product, for example wine or champagne, honey, beauty” is down rather sharply, notes Stéphane Roger, from panelist Kantar. However, not all consumers have the same priorities: in China or South Korea, for example, the beauty segment is considered “more essential” than in Europe, continues the specialist. Fewer sweets, fewer small gifts… It is also on this type of purchase that the cuts are obvious among customers. “Our non-food sales have clearly dropped,” confirms Michel Biero.

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As what is less of a priority is postponed, clothing for growing children continues to sell, but adult clothing is much less successful. The euphoria experienced by DIY and development, in full swing during the Covid-19 epidemic when everyone, confined to their homes, took care of their homes, has subsided. “In all European countries, the volume of sales falls with inflation”, also says Emily Mayer, expert in consumer products of the specialized firm IRI. However, she recalls that “everything should not be linked to inflation”, this reflux can also be explained by higher supermarket sales in 2021 when the Covid was still disrupting meals away from home.

And what about catering?

“Consumers plan to spend better, rather than not at all, like in 2008,” said Maria Bertoch of research firm NPD Group. During this previous inflationary crisis, in Germany, the United Kingdom, France, Italy and Spain, sales in this area had rather held up, ultimately falling by only 2.3% in 2009.

Daily bills scrutinized

Phone bill, car insurance, gym membership… Rather than cutting corners on groceries, many consumers have sorted out their recurring expenses. Renegotiation of mortgages, home insurance… According to the French magazine 60 million consumers, gains can amount to hundreds of euros per month for households.

If spending is scrutinized and prioritized, the same goes for cash inflows: the decline in purchasing power against a backdrop of galloping inflation is fueling wage demands across Europe, with national strikes lately in Belgium and Greece, where “the high cost of living is unbearable”, according to the largest local union.

The changes in habits are especially visible in four areas, here are which: The movement is common to all of Europe: less expensive stores, or perceived as such, are currently winning many new customers, led by Lidl or Aldi. It is to the point that supermarkets considered more expensive like Carrefour are now promoting their discount offer. Another reflex of consumers: a hierarchy of expenses, conscious or not. “Anything that is non-essential product, for example wine or champagne, honey, beauty” is down rather sharply, notes Stéphane Roger, from panelist Kantar. However, not all consumers have the same priorities: in China or South Korea, for example, the beauty segment is considered “more essential” than in Europe, continues the specialist. Fewer sweets, fewer small gifts… It is also on this type of purchase that the cuts are obvious among customers. “Our non-food sales have clearly dropped”, confirms Michel Biero. As what is less of a priority is postponed, clothes for children who are growing up continue to sell but adult clothing is much less successful. The euphoria experienced by DIY and development, in full swing during the Covid-19 epidemic when everyone, confined to their homes, took care of their homes, has subsided. “In all European countries, the volume of sales falls with inflation”, also says Emily Mayer, expert in consumer products of the specialized firm IRI. However, she recalls that “everything should not be linked to inflation”, this decline can also be explained by higher supermarket sales in 2021 when the Covid was still disrupting out-of-home meals. “Consumers plan to spend better, rather than not at all, as in 2008,” said Maria Bertoch of the NPD Group research firm. During this previous inflationary crisis, in Germany, the United Kingdom, France, Italy, Spain, sales in this area were rather maintained, only falling by 2.3% in the end in 2009. Telephone bill, car insurance , gym membership… Rather than cutting back on groceries, many consumers have sorted out their recurring expenses. Renegotiation of mortgages, home insurance… According to the French magazine 60 million consumers, gains can amount to hundreds of euros per month for households. If spending is scrutinized and prioritized, the same goes for cash inflows: the decline in purchasing power against a backdrop of galloping inflation is fueling wage demands across Europe, with national strikes lately in Belgium and Greece, where “the high cost of living is unbearable”, according to the largest local union.

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