It’s not news that our economy is being hit hard by the Covid-19 crisis.
Chancellor Sunak has been clear that “there is hardship ahead”, in line with an independent report by the OBR (Office for Budget Responsibility) that the economy may shrink by a record 35% by June.
The magnitude of this is incredible – the largest in living memory – and sources report that this will be the deepest downturn since 1709.
But this isn’t the first time that our economy has been in recession and it’s important to look at previous trends and insights to predict what might happen now.
Firstly, a positive insight: the food sector suffered much less in the last recession than many other industries – and grocery store spending remained fairly steady.
Here are some of the key consumer spending trends we saw in the Great Recession:
• To save on outgoings, the number of home cooked meals increased. And this meant that long life, store cupboard and seasoning categories saw a sales uptick.
• Premium, restaurant style ready meals continued to be bought for special dinners and eating together as a family became the norm again.
• Chocolate was still needed. Consumers still allowed budget for indulgences, such as chocolates and confectionary, although price was still considered.
• Everyday luxuries, such as good coffee retained.
• Baking at home increased, with cake making kits and corresponding ingredients making steady sales.
• Concern around wellness was high and health was a priority. Vitamins were still bought and people tried to eat better as they had more control over ingredients in the kitchen and really started eyeballing back-of-pack to check for nutritional information.
• Cereal purchases increased. This was due to eating breakfast more at home but also as a result of consumers eating it beyond breakfast as a convenient snack throughout the day.
• Consumers undertook more cost savvy spending. There may have been an increase in visits to supermarkets but the overall basket spend was less. Consumers were more responsive to discounting and offers and would look to buy in bulk where possible.
Although we can anticipate a similar pattern in consumer spending, in 2020 we are now in a very different place – with more tech solutions than ever to allow brands to speak, market and sell direct to their target consumers.
How do you market to a consumer who potentially has less money and is worried about finances?
In a nutshell, the solution is relevance. Think about how and why can you show up in a consumer’s life and add value, cutting through the noise to foster long term loyalty amongst a targeted audience.
It’s important to start planning now for the new economic landscape, re-evaluating your sales, marketing, PR and Digital communications plans to ensure that your brand is adapting and thriving in the ‘new normal’.
We are here to help – please get in touch for some a complimentary Covid-19 Care Consultancy session during this time: firstname.lastname@example.org