We cut costs, look for deals, buy more often than on sale: Inflation is changing Europeans

Increase sales in discount stores, search for the best deals, boom the used market, reduce expenses…Against inflation which affects Europe for many months now, consumers have been trying to adjust their habits to retain as much of their purchasing power as possible.

Discount stores at the dance

In a rather typical development: in the UK where inflation is running at 10%, Germany’s Aldi became the country’s 4th largest supermarket chain at the start of the school year, behind Tesco, Sainsbury’s and Asda, overtaking Morrisons.

This movement is common across Europe: less expensive stores, or those perceived as less expensive, are currently gaining many new customers.

“In France, we gain 500,000 customers in each period,” analyzed by Kantar, Michel Bieraud, executive sales director at Lidl, told AFP.

“The stores that work best today are Leclerc, Aldi, Lidl and Hyper U, which are currently the least expensive,” said Michel-Edouard Leclerc, president of the strategy committee at E.Leclerc stores.

To compete, Carrefour, considered more expensive by industry experts, insisted in early November on its ‘discounted’ offer during the presentation of its own design for the coming years.

In Spain, where food products grew by more than 15% in a year, Mercadona, which is somewhere between a discount company and a supermarket (with a large sales area but with a considerably reduced variety), retains more than a quarter of its market, well ahead of Carrefour (9.6%) and Lidl (5.8%). But competition with the latter and Aldi has intensified in recent months, according to Kantar.

Priorities and opportunities

Another reflex of consumers: a prioritization of expenses, conscious or unconscious. “All those that are non-essential products, for example wine or champagne, honey, beauty products” are quite reduced, noted Stephane Rose of the Kantar company.

However, not all consumers have the same priorities: in China or South Korea, for example, the beauty product segment is considered “more important” than in Europe, according to the expert.

Fewer sweets, fewer small gifts…It is also in this type of shopping that the reductions are evident among customers. “Our non-food sales are clearly down,” says Michel Bieraud.

As the less important and postponed, clothing for growing children continues to sell but adult clothing is much less successful. Interest in handyman and renovation work, which was at the center during the Covid-19 epidemic, when everyone was busy with their home due to the quarantine, has been limited.

“In all European countries, sales volumes are falling with inflation,” says Emily Mayer, FMCG specialist at IRI. He said however “we shouldn’t put it all down to inflation”, this decline could also be explained by higher supermarket sales in 2021 when Covid prevented those who wanted to dine out.

The accounts of everyday life through a fine sieve

Phone bills, car insurance, gym memberships—instead of cutting back on shopping, many consumers are streamlining their recurring expenses.

Renegotiation of the mortgage, home insurance…According to a French magazine ’60 millions de consommateurs’, the benefit can reach hundreds of euros per month for households.

If expenses are being sifted and prioritized, so is income: declining purchasing power against a backdrop of soaring inflation is fueling wage demands across Europe, with general strikes in several countries.

RES-EMP

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