Business

Shoppers still focused on price even as inflation slows

Irish people increasingly aware of ‘shrinkflation’

Irish shoppers still focus on price and discounts, according to KPMG. Photograph: Alan Betson

Barry O'Halloran
Tue Jun 4 2024 - 06:00

Price remains the biggest influence on Irish shoppers, who are increasingly aware of manufacturers that cut products’ weight or quantity to combat inflation, a new study has found.

More than half those who responded to surveyors in April said price continued to be the main driver of where they chose to shop. Meanwhile, 76 per cent told the latest KPMG study of shoppers’ attitudes that discounts continued to influence their purchases.

“Many consumers have adopted a variety of cost-cutting strategies in an effort to combat the rising cost of living,” KPMG’s latest Next Gen Retail survey reveals, published on Tuesday.

About six out of 10 people say they swerve brands whose manufacturers use so-called “shrinkflation” to combat their own rising costs. The practice, where manufacturers cut the weight or quantity of a product while maintaining or increasing the price, came under renewed focus as inflation accelerated in recent years.

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Meanwhile, shoppers continue to cut spending as they grapple with higher prices. Nearly two-thirds are reducing purchases of luxuries or non-essential goods, about half opt for own-label products while close to six out of 10 have reined in their social lives, the survey says.

Commenting on the findings, Keith Watt, KPMG’s head of retail, said Irish consumer sentiment fell for a fourth month in a row in May.

He said the accountants’ firm’s research continued to show that price was the primary motivation for where people decide to shop. “However, shoppers still value quality and strongly oppose brands that engage in shrinkflation or cost-cutting to the detriment of quality,” Mr Watt said.

“This presents opportunities for brands and retailers to differentiate themselves,” he added.

He maintained that understanding and adapting to those shifting consumer preferences would be crucial for retailers seeking to remain competitive.

Meanwhile, the climate friendliness of a product is becoming increasingly important to shoppers.

More than two-thirds of shoppers now expect brands to make sustainable and so-called circular products more accessible and affordable, the survey finds. Close to 60 per cent want more information about companies’ sustainability efforts and for them to take responsibility for reversing environmental damage. More than half feel brands have a more active role to play in educating consumers on the environmental impact of their purchasing choices, and 37 per cent prefer to shop for brands that are open to repairing, reusing and recycling their goods. About a third of those surveyed are willing to pay a higher price for more sustainably produced goods.

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas

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