Amidst ongoing food inflation, Kantar data provided to the British Frozen Food Federation reveals changing customer preferences.
The most recent data, which spans 52 weeks and concludes on March 17, 2024, shows significant trends in consumer behavior combined with a little 0.1% increase in the volume of frozen food sales.
As a result of the persistent problems with food inflation, customers are increasingly choosing own-label goods over well-known brands. During the same 52-week period, total branded volume decreased by -3.7 percentage points, while total private label volumes climbed by 2.2 percentage points. Volume and value sales at discount stores are surging as cost-conscious shoppers migrate from three of the top four supermarkets to less expensive options. This big change is visible across the board, showing that even in the face of economic uncertainty, consumers still place a high priority on value.
However, within the larger trend towards own-label products, upscale shops like M&S have seen a little increase in frozen food sales. This subtle trend points to chances for shops to take advantage of changing consumer preferences and expand their frozen offering by suggesting a persistent demand for value even in a premium setting.
“While food inflation remains a persistent challenge, we are witnessing a notable change in consumer behaviour,” said Rupert Ashby, CEO of BFFF. “The data reflects a shift towards value-driven purchases, with consumers increasingly prioritising affordability without sacrificing quality. Volume share increases of 0.8 and 0.6 percentage points for Lidl and Aldi and a decline of -0.6 and -0.8 for Morrisons and Asda over the 52 week period show where the most change is happening. Sainsbury’s is bucking that trend with a 52 week increase of 0.6 in volume sales.”
“With the national minimum wage on the rise and the rate of inflation now slowing down, consumers can anticipate a potential reprieve on the financial struggles of the last few years. As economic conditions stabilise, we anticipate a resurgence in consumer spending power, presenting new opportunities for frozen food manufacturers. Yet this is somewhat of a double-edged sword. More expensive labour in an already stretched market means that manufacturing costs will rise, and this will likely be passed on to the consumer in the price of the product. Global conflicts continue to cause market disruption so we’re a long way from being out of the woods yet.”
According to Kantar data, the value of the grocery market as a whole increased by 5.0% during the previous quarter. Nonetheless, it’s evident that customers are getting less for their money when seen in conjunction with the declining volume figures. Frozen potato goods saw a large increase in value (+11%), within some categories, suggesting major pricing adjustments in this sector. Given that low yields have been caused by bad weather, supply problems can be blamed for this increase.
Find out more at: https://bfff.co.uk/