Consumer confidence remains positive
Consumer confidence is a measure of how people feel about present and future financial circumstances, both for themselves and for the wider economy. When the index is high, consumers are expected to increase their spending on goods and services; when low, a decrease in spending is usually anticipated.
One of the ways in which consumers dealt with the squeeze in their post-2008 disposable income was to become more ‘savvy’ when shopping for groceries. Many decided to ‘trade down’. Hard Discounter retailers benefited from this and grew quickly. The rate of increase has slowed, but good growth continues. In the 12 weeks ending 29 January 2017, Aldi became the UK’s fifth largest supermarket. Its Every Day Low Price (EDLP) strategy caught on quickly with consumers, and has been extremely influential on the entire grocery market. In the time after the banking crisis, consumers used discount stores because they had to, now many use them because they prefer to.
Since 2012, consumer confidence and other economic performance indicators have been generally positive. Despite doom laden forecasts following the Brexit vote, almost all financial performance measures have been relatively positive. The consumer confidence index has been a little changeable but, when compared to historical levels, has remained high. In normal times, consumers are expected to trade-up and be more willing to treat themselves. However, some behaviour learnt when the index was low continues. Consumers are still seeking the best value, and use deals, offers and promotions whenever possible.
It is important for the pork industry to understand these drivers for consumers when looking to entice them back into the category. This is especially true considering the recent declines in the overall retail spend on pork products. According to the latest data from Kantar Worldpanel, in the 52 weeks ended 29 January pork retail volumes had fallen 3%. This is despite the average price of pork products being 6% lower in the same period.
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Developments in consumer markets, both at home and abroad, are key drivers of demand for pig meat. A range of articles about trends can be found on the Consumer Insight section of AHDB’s website. The site, which can be accessed by clicking here, also provides links to key market data and copies of AHDB’s Consumer Insight newsletter.
Stewart Batchelor, Consumer Insight Analyst
024 7647 8852, email@example.com