Shopping habits change as inflation eases
WHAT a year! Food and drink sales in Scotland are worth £11.8billion and are growing at 4.1%.
Brands make up 44.5% of this and are growing at 2.5%, according to Kantar Worldpanel data.
During 2024, we saw many changes in shopper behaviour at Kantar. It started back in January as inflation gradually reduced and, as the year progressed, we have seen volume growth coming back and continuing from February.
Prior to that, inflation was driving the growth. At the time of writing, inflation is sitting at a comparatively “normal” 2.3%. These changes will have been felt by all the brands within this year’s list.
At Kantar, we are also seeing momentum turning back to brands as inflation falls and more well-known names are appearing shoppers’ baskets as they look to trade up and try new products. This is also driven by the increased growth in promotions.
The retailers’ own-label ranges still represent serious competition and while brands have grown in value year on year, they have not yet matched the growth rate of the own-label offering.
Both standard and premium own-label have grown consistently in value and volume during 2024, with the premium tier growing the fastest and outstripping that of brands. The challenge for brands will be to win those customers back during 2025.
The convenience channel has faced fierce competition from both the discount and online sectors.
The larger brick-and-mortar supermarkets are also seeing a higher proportion of shopper spend being lost to the online channel, with more customers continuing to do more of their shopping online.
Focusing on consumers’ replenishment and top-up missions will be key to the sector next year.
Consistent trends that provide opportunities for manufacturers and retailers alike include shoppers’ need for convenience.
Scratch cooking is in decline versus four years ago and households looking for quick meals are increasing their share of breakfast, lunches and dinners.
For lunch, more of us are buying it when we are out rather than preparing a packed lunch, again providing opportunities for the convenience sector.
We are also choosing to recreate in our own kitchens more of the cuisine that we enjoy from the out-of-home channel, including our favourite Asian, Mexican and Italian meals.
Who are the movers and shakers in this year’s list? There is no change to the top three. However, we now have McGhee’s Bakery in fourth place.
McGhee’s has always been included in the data but, up until this year, were being categorised as part of “other brands” within bakery and we have been able to rectify this.
Bells, Tunnock’s and Baxters all fell back one place as a result. Following its successful rebranding, Taylors has moved from 44th to 23rd place as we capture a full year of sales. Nine brands have moved up the list, 15 have retained last year’s position and 24 have moved down.
To ensure success, brands need to demonstrate that, from a product’s inception to its launch, each part of this journey has been driven by shopper insight and offers a solution to a consumer need – and that it can be supported once it has been released.
At Kantar, our data shows that, for brands to grow, they need to maximise their number of shoppers and they need to be available in as many stores as possible to do that.
Being listed in convenience allows them to do this and to be selected for the all-important replenishment and top-up missions.
Looking forward, we are seeing some signs of optimism from our pressure groups. We segment our panel into shoppers who are struggling, managing or comfortable.
For the first time since April, we have seen the comfortable shoppers, who do not need to restrict their spending in any way and can manage their grocery bill, grow to 37%.
We also believe health will once again be a key trend in 2025. When inflation remains low, health increases its importance.
While health means different things to different people, we are seeing them choose products that have a positive impact, such as additional protein.
