Sustainability trend takes back seat as cost of living crisis bites
With shopper priorities in the next 12 months instead focussed on money, wellness and spending time with friends and family, most consumers (71%) are prioritising value for money over sustainability when shopping for food and drink. That’s up from 58% in October, according to research conducted in March on 1,000 UK consumers by specialist food and drink business consultancy Levercliff.
Getting by financially and mental wellness were the main priorities among younger consumers. Most over 65s said physical wellness and spending time with family and friends were key priorities post-lockdown.
Growing pressures on household finances means most consumers aren't prepared or able to move to sustainable products at any cost, said Levercliff Insights Manager Clair Prior.
"It's not that consumers don't care [about sustainability], but they have more pressing concerns. With the cost of more sustainable options seen as the main barrier to shopping more sustainably, current financial pressures will only be serving to exacerbate this perception. Our research has also indicated it goes beyond price in that consumers don't want to change their eating habits or stop buying from the brands they know and like. They often don't feel that the choices are out there to make that switch.”
Levercliff Director Clodagh Sherrard said the industry still needed to make it easier for consumers to make sustainable choices to avoid the potential of government legislation “being forced on them”.
When consumers are taking sustainability into account when buying food and drink products they are relying on tangible factors such as packaging and standards labels markings to decide which products are more sustainable than others. Where they struggle is in weighing up the carbon footprint of products. "There's no widespread way of comparing one product to another," said Prior.
Interestingly, food waste is the main area where consumers are taking action, mainly led by more time-rich older consumers. That's because this action saves them money as well as helping the environment.
Older shoppers are also more concerned with buying locally, while younger consumers place a greater weight on the sustainability of packaging and how companies treat their workers.
UK grocery inflation hit an 11-year high in April, according to separate data from Kantar. It said prices were 5.9% higher than a year ago, blaming rising energy bills, supply problems and the war in Ukraine for pushing up costs.
Supermarket sales also fell 5.9% in the 12 weeks to April 17. Fraser McKevitt, head of retail and consumer insight at Kantar, said: “We’re seeing a clear flight to value as shoppers watch their pennies. The major retailers are listening to shoppers’ concerns, with Asda launching its Just Essentials line, Morrisons announcing that it is cutting the price of many everyday goods, and Tesco locking in savings through its Clubcard strategy.”
Yesterday Sainsbury’s lowered its profit guidance for this year, with Chief Executive Simon Roberts warning: “The year ahead will be impacted by significant external pressures and uncertainties, including higher operating and cost inflation and cost of living pressures impacting customers’ disposable incomes.”
Unilever too has reported a dip in sales in the first quarter as it anticipates “unprecedented cost inflation” in the coming months.
The rising cost of food and drink is having a significant impact on UK adults, said Sherrard. “Unsurprisingly we're seeing the biggest impact with households with families. But It is top concern among consumers of all ages and social status and we can see a significant jump from when we last asked this question back in October.
In the October survey the top priority was what households enjoyed. That's now playing second fiddle to shopping around and budgets.”
It was “telling”, she added, that some consumers are reporting that downtrading isn't a solution them - they are already buying the cheapest products. "There's nowhere else for them to trade down to,” she said. “It means that for some of them either going without or cutting back is the only viable options.”
The coming HFSS legislation in October will make things worse, she warned, as it will lessen the ability to buy brands on offer. On the flipside, the rules may help people get healthier.
“There's been a significant increase in the numbers who say they'd like to make healthier changes [up from 25% to 32%],” reported Sherrard.