Rising food prices is affecting the grocery decisions of eight out of 10 people globally, prompting marketers to reconsider how they evaluate their consumers, according to an updated online poll from Nielsen.
Asking 29,000 people across 58 countries between February and March, the Nielsen Global Survey of Inflation Impact reported that 85% of global consumers say they will adjust their grocery buying habits in response to rising food prices.
In the Philippines, more than half (61%) said they will change their spending for new clothes and accessories, followed by dining out (59%), snack food (51%), recreation and entertainment (41%) and traveling or vacation (38%).
“Rising food prices impact nearly all consumers,” says Stuart Jamieson, managing director of Nielsen Philippines.
“Instead of using income to gauge spending habits, FMCG companies should look at consumer diversity, spending flexibility and the consumer demand landscape to have a better understanding of buying potential and to accurately assess goods and services that can meet consumers’ needs,” he adds.
Seven out of ten of Filipino respondents said they would buy fewer products such as chips and other snack foods (75%), carbonated beverages (73%), and candies, cookies and other sweets (71%).
Despite the price pinch, Filipinos prioritize having fresh food in the cupboard. Around 20% of Filipino respondents said they would buy more fish and seafood. Around 16% would stock up on fresh or frozen fruits and vegetables while 15% said they would buy more organic products.
The only items they will not compromise spending are on main meals at home (65%), education (64%), medical, which includes doctor and dentist visits, medicines and vitamins (63%), savings and investments (52%), and housing, which includes rent, mortgage, utilities (40%) despite food inflation.
“It is critical for FMCG companies to determine which product categories are resilient and which are more vulnerable as consumers make trade-offs and tough in-store decisions.”
“Marketers should take note that as consumers feel the pinch, they look for ways to stretch their budgets and find the best value for money. It is important for marketers to identify retailers that will satisfy the unique demands of consumers,” Jamieson advises.
During times of rising food prices, 40% of Filipino consumers surveyed said they would purchase only sale-priced items, with 36% saying they would stock up on regularly used items when they are sold at bargain prices.
This is supported by a growing preference to shop at discount/dollar stores (36%) and clearance stores (20%). Also, around 35 percent said they would purchase larger pack sizes and 20 percent would serve smaller portions.
An emerging trend is Filipinos turning to the internet for their saving strategies. Around 21% said they would look for deals online while 20% would use social media to find specials.
Around 30% still visit fresh food farmers’ markets when food prices are high and 25% at warehouse club stores. Some prefer newer store formats like supermarkets (20%) and hypermarkets (18%) as prices rise.
Fifteen percent prefer to visit local neighborhood (sari-sari) stores. Rising food prices have even made 32% of the respondents to limit their store visits and grow produce in their own backyard instead.