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Just as the world was returning to some kind of ‘normality’ it didn’t take long for war in Europe, surging inflation, soaring fuel and energy prices, along with severe bouts of load-shedding to cast a particularly dark shadow over the first half of 2022. Now, in an increasingly stressed economy and shrinking middle class, retailers and big businesses will need to re-think their strategies if they want to remain competitive.
Retailers and brands need to sharpen the saw when it comes to their responsiveness to consumers’ changing needs. As the world is buffeted by one crisis after another, the resilience that consumers have shown during Covid times is being put to a longer test. Keeping tabs on what consumers are putting in their baskets is not enough to understand the drivers as consumers dynamically adjust priorities and shift aspirations in reaction to ongoing disruptions and uncertainties.
The FNB/BER Consumer Confidence Index (CCI), which surveys 2 500 South African households dropped from -13 in the first quarter of 2022 to -25 by the end of the second quarter, suggesting that South Africans may well tighten purse strings even more in the upcoming months. Marketers, faced with increasingly cautious, budget-conscious consumers will be challenged when it comes to sorting knee-jerk reactions from what might become long-lasting behaviours.
Andrew Harrison, Head of Sales at Alpen Foods has been observing consumer patterns of his retail customers over the past months, and says, “Supermarkets are seeing a marked increase in large month-end shops in store, with by far the majority of their revenue being generated between the 25th and 7th of the months. – Bloomberg
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