LONDON: Some 80% of UK consumers are still directly affected by the economic downturn and are adapting their habits to cope, according to the latest findings from Crunchonomics, a regular new survey study by media agency BLM Arena.
Over a half (57%) of people said that they were now more likely to consider switching a purchase to private-label foods than they were in March, when BLM last released data. Its reflects a growing pessimism that the economy could worsen still over the next three months.
Coca-Cola, Hovis, Birds Eye and Heinz were all put under the survey's microscope to see whether these leading examples of premium brands could still maintain loyalty despite their higher price than own-label alternatives.
A third (34%) of consumers claimed they would remain loyal to Coca-Cola, although only 22% agreed it had a very good price, whilst exactly a quarter of consumers supported Hovis and its pricing. Loyalty scores for Birds Eye and Heinz were 33% and 37% respectively, whilst enthusiasm for pricing was comparatively high at 38% and 35%.
"Brands need to reassess their consumers hierarchy of needs and revise their strategies accordingly to ensure they remain as relevant,” said Charlie Makin, chief strategic officer at Arena BLM. “The results show that major brands are not perceived to be in touch with what consumers want."
Although the study reported stability of spending levels on essential items, discretionary spending on treats and luxuries has taken a dip. The worst hit areas are bars and nightlife, with 47% of people decreasing their spending, clothing with 51% cutting back and eating out with more than half (52%) reducing their restaurant expenditure.
Holidays, however, appear to have bucked the rumours that 2009 would be a stay-at-home summer, with demand remaining high. That said, over a half (54%) of consumers plan to hang back for late deals.
Comments Makin: "Consumers still view their holidays as a staple requirement and marketers will have to adapt their strategies to ensure they remain front of mind among the late bookers."
The Crunchonomics study is based upon a survey of 1000 people, divided into 5 equal groups: young independents, secure families, insecure families (with employment fears), empty nesters (children have left home) and pensioners.
Data sourced from Marketing Week; additional content by WARC staff