SA data reveals dramatic drop in frequency of shopping

This latest trend was strongly manifested in the third quarter of 2021, indicating the ongoing financial consequences of Covid-19 and is correlated with the unprecedented increase in unemployment rates (Stats SA Q2 2021).

This analysis is taken from NielsenIQ Retail Measurement Services and Household Panel benchmark data and provides a stable comparison of the pre-Covid-19 period, against current conditions amid the current state of flux. This “20/20 view” on 20 months of change in the manufacturing and retail sectors in South Africa, also highlights the far-reaching implications for brand owners and retailers, given the financial fallout. continuing in South Africa that are straining consumers’ wallets.

Fewer trips, but bigger baskets

Elaborating on the results, NielsenIQ South Africa MD Ged Nooy said; “The reduction in the frequency of shopping has also resulted in an increase in the size of the basket, with consumers adding four more items to their basket, which has gone from a total of eight to 12.

“However, what we have found is that consumers have not increased the number of categories they shop in. On the contrary, there has been a reduction in the number of categories landing in their shopping cart while they are shopping. increase on essential items This change in behavior resulted in an increase in the average value of the pre-Covid-19 basket from R226 to R427.

The NielsenIQ analysis also found that there had been behavioral changes in all walks of life, but at different rates due to the income disparity between the groups. The higher LSMs saw a more marked drop in the frequency of races.

“Before Covid-19, the average number of shopping opportunities in this target market was seven per month, but by August 2021 it had fallen to four. The lower LSMs were already limited and although their frequency of travel has also decreased, this is not as big a drop as what we see in the upper LSMs, but it is significant nonetheless, ”Nooy reports.

What has this meant for brands?

As reliability and trust create certainty in a time of constant flux, another key development is that the well-known and long-established historic ‘A-brands’ gained strength during Covid-19. In light of this, 75% of the 20 brand managers have increased or maintained their share since the onset of Covid-19.

“These brands have been able to maintain the supply chain and offer confidence and security to cash-strapped consumers. Consumers are cautious about spending and making choices based on their cash flow and sticking to brands that keep their promises, ”says Nooy.

This year, South African consumers also switched stores due to limited movement. “It’s interesting that this continues, where wholesalers have gained buyers over the past year as constrained households look for better deals and in some cases switch to buying wholesale. However, this is not the majority, as grocery retailers still have the highest levels of household shopping on this channel. “

A return in promo

Another factor in the store change was consumers looking for promotions. This stems from a reduction in promotional activity at the height of the Covid-19 blockages in 2020, while in 2021 we saw the start of a return to pre-Covid-19 promotional activity.

However, Nooy cautions; “What remains critical, especially as the important annual Black Friday promotional period approaches, is for the industry to fully understand the effectiveness of promotions in order to better manage substitution in light of the reduced frequency of shopping. It is therefore important to control the price elasticity of the category and the brand, to allow precise pricing and aligned with brand equity.

Looking ahead, Nooy says that with rising oil prices, ongoing power cuts and a potential fourth wave of the Covid-19 pandemic, the outlook is unfortunately not very optimistic and brands and retailers will feel the pressure. pressure from a coerced consumer over the past two months. from 2021 to 2022.

In light of this, he said; “It is essential that brands understand their portfolios, price range, relative price position and promotional effectiveness. The assortment and innovation are also essential because they feed the major trends related to well-being, organic and sustainability.

Sources:
NielsenIQ Retail Measurement Services (end of August 2021)
NielsenIQ Consumer Panel Services (end of August 2021)
NielsenIQ Analytics Intelligence Shattering Myths About Pricing And Promotions During The Pandemic

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