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How shoppers are changing their spending habits in the light of the cost-of-living crisis: DMA

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More than half of shoppers say deals or offers lead them to change their minds about what brands or shops to use, new data suggests, according to DMA research into how shoppers are changing their behaviour in the light of the cost of living crisis. 

The DMA’s How to Win Trust and Loyalty report is part of a DMA series focusing on customer engagement. It finds that that most had made changes to the way they spent in the previous six months or were planning to make changes to spending habits in the future, and looks at how these changes are happening in practice.

The DMA questioned 2,003 UK respondents aged 16 and over, via Foresight Factory. More than half (51%) said deals and offers often led to them changing their mind about which brands or shops to use – up from 49% in 2020 – and 40% (36% in 2020) said they would stop buying from a brand or shop if it stopped offering deals. More than three quarters (78% 2022 /77% 2020) say they will send time researching products to get best value, while 67% (67% 2020) say they spend time comparing prices when making an important purchase decision. 

How shoppers’ spending has changed

Looking at how shoppers had changed their spending in practice, 36% said they were most likely to have started buying fewer groceries or household items, while maintaining the brands that they are currently buying from. 

“Our new research reveals consumers are more likely to have cut back their spending than to have stopped spending completely,” says Scott Logie, chair of the DMA customer engagement committee, MD at Read Group Insight. “This places consumers in an interesting mindset where they are prioritising their needs and questioning existing habits and loyalties. Consumers still want to be loyal to the brands they love and they also want to retain the habits they have built up. However, that may not always be possible in these unprecedented times, so offers and cheap prices are becoming increasingly attractive. For brands, that creates a challenge, to stick or to twist, to keep doing what built up loyal customers or to chase possible switchers with offers.”

By spending category, only 27% said they did not expect to change their spending on clothes – 14% said they had stopped spending altogether and 38% had reduced spending in the last six months, while 21% expected to do so in the next six months. Some 30% did not expect to change their spending on household products, and 32% their spending on groceries. However, 42% had already cut back spending on groceries and 26% expected to do so in the next six months. Spending on holidays and media subscriptions were among the more protected categories, with 38% and 42% not expecting to change their current spending. 

 Some 39% of shoppers who spend on eating out were cutting back on this, while 18% had stopped altogether. Twenty-one per cent of those who drink out of the home had stopped spending on this, and 21% of those who spend on fitness or sport had also stopped spending. 

While brand loyalty remains the consumer default – 51% are ‘active loyals’ and 21% (up from 17% in 2020) are ‘habitual loyals’ – some 41% said they felt less loyal to brands and companies than a year ago – contrasting with the 34% that did so in 2020 when this research last took place. 

Tim Bond, director of insight at the DMA, adds: “The UK’s cost of living crisis provides a significant backdrop to any recent changes observed in consumer attitudes to loyalty. But change doesn’t have to be a bad thing if brands are responsive and actively seeking opportunities for how they can best serve their customers. While we have seen an impact on discretionary spending and shopping habits, this hasn’t stopped all consumers from feeling loyalty – just the most effective ways for brands to earn and retain it.”

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