Pricing and promotions through the eyes of the consumer

Erik Vágyi
head of sales
Nielsen

Food prices are rising and shoppers are worried – reveals the latest Nielsen ‘Shopper Trends’ survey. Back in 2017 growing food prices was only the 6th biggest shopper concern, but today it is already ranked 2nd. Shoppers try to offset the price increase by purchasing only the essential products and fewer premium groceries. A bigger proportion of consumers are buying reduced-price FMCG products or fewer groceries. More and more consumers are switching to cheaper brands, too. Typically in the fruit juice, carbonated soft drink, hair care and healthcare categories shoppers choose private label products instead of branded ones.

Shopper Trends also revealed that two thirds of consumers are price-conscious. This is the truest for dairy products, where 69 percent of consumers are familiar with the prices. Product price also has an impact on deciding which store to visit. However, consumers are willing to pay higher prices for a few categories, e.g. ice cream, bonbon, frozen foods, coffee capsules, yogurts and muesli bars belong here. Shoppers also have the same attitude about essential products such as toilet paper or cooking oil. 39 percent of respondents claimed they would pay an extra for products free from additives.

It also differs across categories how sensitive shoppers are to promotion campaigns. Three quarters of consumers are hunting for promotions, from which 75 percent like price discounts the best. On average shoppers switch stores for a 20-25 percent price advantage. In the food segment 40 percent of sales are realised in promotion; in the drug categories this ratio is higher at 46 percent. What is necessary for success? A good pricing and promotional strategy, as two thirds of shoppers are price-conscious and three quarters are searching for promotions actively. //