Orange with media services, Posted on Sunday 20 November 2022 at 07:00
Faced with inflation, Europeans are setting their sights on discount brands and prioritizing their spending.
Inflation does not deter anyone. Prices have been rising around the world for months, particularly in Europe which has been hit by soaring energy prices.
One of the most prominent results is the increase in food prices, which has not been seen in more than forty years. To maintain their purchasing power, European consumers try to adapt their habits, especially in the supermarket.
popular reducers
It’s quite code: In the UK, the German Aldi became the fourth largest supermarket in the country at the start of the school year, Morrisons are over 100 years old, behind Tesco, Sainsbury’s and Asda. This movement is common throughout Europe: stores that are less expensive, or are perceived as such, are currently winning many new customers.
“In France, we win 500,000 customers per period,” explains Michel Pierrot, Executive Director of Purchasing at Lidl, analyzed by lecturer Kantar. “The brands that work best are Leclerc, Aldi, Lidl, Hyper U and they are the cheapest today”, as estimated by Michel Edouard Leclerc, Chairman of the Strategic Committee of E.Leclerc Stores. To deal with the matter, Carrefour, which is considered more expensive by industry professionals, insisted in early November on offering the “discount” when presenting its travel plan for the coming years.
In Spain, Mercadona, which is halfway between a discount and a supermarket (with large sales areas but a fairly small assortment), has more than a quarter of the market, far ahead of Carrefour (9.6%) and Lidl (5.8%).) . But the competition with the latter and with Aldi has intensified in recent months, according to Kuntar.
Determine spending priorities
Another consumer reflex: a hierarchy of expenses, conscious or not. “Anything not essential, say wine or champagne, honey, beauty,” points out Stefan Roger, from panel member Kantar, “down fairly sharply.” Less sweets, fewer small gifts … Discounts are also evident among customers in this type of purchase. “Our non-food sales are clearly down,” Michel Piero confirms.
With less priority held back, growth children’s clothing continues to be sold, but adult clothing is less successful. The euphoria of DIY and development has faded by leaps and bounds during the Covid-19 pandemic when, confined to their homes, everyone took care of their homes.
“In all European countries, sales volumes decrease with inflation”says Emily Meyer, a consumer products expert for IRI Specialty. However, she remembers that “not everything should be linked to inflation,” and this bounce can also be explained by higher supermarket sales in 2021 when Covid was still disrupting meals away from home.
What about catering? “Consumers plan to spend better, rather than not spending at all, as they did in 2008,” said Maria Bertoch of the research firm NPD Group. During this previous inflationary crisis, in Germany, Great Britain, France, Italy and Spain, sales in this area were somewhat sustained, eventually declining by only 2.3% in 2009.
Checking daily bills
Phone bill, car insurance, gym membership … Instead of “cutting back on shopping,” say the 60 million consumers, who have a special issue devoted to recipes to “restore purchasing power,” Many consumers have sorted out their recurring expenses. “I called the SFR to beat my nerves and got a discount of 5 euros per month,” says Mathilde Guillerme, a mother from Lille.
Renegotiating mortgages, home insurance… For 60 million consumers, gains can run into hundreds of euros per month for households.
If spending is scrutinized and prioritized, the same is true of cash flows: the decline in purchasing power on the back of accelerating inflation is fueling demand for wages across Europe, with national strikes recently in Belgium and Greece, where “the high cost of living is unbearable”, According to the largest domestic federation.
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