Australians feel pinch at grocery checkouts

New research from dunnhumby, a company that specialises in customer data science, reveals over a third of Aussies (35 per cent) have noticed the price of groceries across the country is increasing, with many feeling their money being stretched during the COVID-19 pandemic.

The dunnhumby Coronavirus: Australia – Attitudes and Behaviour report, which surveyed the shopping attitudes, behaviours and satisfaction of consumers, found 37 per cent of Aussies say that their money isn’t going as far as it used to when grocery shopping. The research also shows significant concerns about the longer-term impact of COVID-19 on the economy and personal finances, with 41 per cent of Aussies saying their own finances are weak and over three quarters of respondents (76 per cent) feeling that the economy is in a bad shape.

“Now more than ever, shoppers want a good deal. Regardless of price increases, it is still the perception of price and value that matters,” says Kylie Gleeson-Long, managing director at dunnhumby Australia. “Retailers must ensure they are using data to inform their strategies on which levers to pull to ensure customers feel better off, whether it’s base prices, promotions, assortment, personalised offers, communications, own label, store or online customer experience.”

The survey shows a rise in number of shopping trips in-store (84 per cent) versus online as behaviour moves towards pre-pandemic levels. Further, over one third (38 per cent) of people are saying that they spend more per trip, which points to bigger basket sizes and the continued trend of eating at home.

Separately, 62 per cent of people say they are making fewer visits a week, and 57 per cent of Aussies are shopping at fewer stores, opting to buy everything from the one retailer. This highlights the importance of retailers being seen as delivering a good ‘value for basket’ amount as well as having the right assortment of products and safe in-store conditions.

“Aussies can be confident in grocery retailers’ abilities to provide everyday essentials while keeping you safe in store when you visit, without the need for ‘stocking up’ or spending more in the process,” Gleeson-Long added.

When asked to rate their confidence in the largest grocery retailers, 46 per cent of Aussies say that Woolworths is doing a good job at managing coronavirus and its related issues. This was followed closely by Coles at 38 per cent and ALDI at 16 per cent.

Trust high, loyalty low in grocery sector

Research by data science specialist dunnhumby in the form of a consumer pulse survey revealed that trust and satisfaction with grocery retailers in Australia has surged following the COVID-19 global pandemic.

The COVID-19: Australia – Attitudes and Behaviour report, which surveyed the shopping attitudes, behaviours and satisfaction of 400 consumers in Australia, showed more than two-thirds (69 per cent) of Aussie shoppers agree that grocery stores are doing a good job managing the pandemic – a significantly higher rate than the average of 54 per cent worldwide. Interestingly, this figure is even higher than the trust in government, with 64 per cent of Aussies agreeing that the government is doing a good job. Globally, the benchmark average of shoppers who think that their government is handling the COVID-19 situation well is only 41 per cent.

Despite 83 per cent of Aussie consumers surveyed saying they are practicing social distancing, the findings show Aussies still prefer to purchase their groceries in store, with only 20 per cent of grocery trips being done online (compared to the global average of 30 per cent). The Australian average is also well below other APAC markets. For instance, in China and Korea, 60 per cent and 52 per cent of grocery shopping is now being done online, respectively.

Kylie Gleeson-Long, managing director at dunnhumby Australia, commented, “Australian shoppers are exhibiting less changed shopping behaviour than what we’re seeing in other markets because of how well retailers have identified the need to keep people safe balanced with a good shopping experience. The only exception is that Aussies appear to be spending more on groceries per trip, but this is probably because they are making fewer trips in total.”

Customer satisfaction with in-store experiences remains higher in Australia (23 per cent) than the rest of the world (16 per cent). The majority of survey respondents also agreed with a number of actions implemented by grocers in Australia to help manage the spread of the virus compared to global respondents, including special hours for certain people (90 per cent vs. 81 per cent globally) and limiting the number of quantities purchased (85 per cent vs. 79 per cent globally).

“In light of these findings, it’s important for retailers not to become complacent, even though the extraordinary actions they have taken over the past couple of months have been praised. Customer satisfaction is strong but we know that loyalty among Australians is historically low, with the majority shopping across multiple supermarkets. If anything, the pandemic has highlighted how critical the shopping experience both in-store and online really is,” Gleeson-Long said.

Other findings include:

  • Australians are most likely to notice quantity limits imposed on certain items at 73 per cent – a rate significantly higher than elsewhere in the world at 44 per cent.
  • While Australians are more likely to notice out of stocks in stores, they are less likely (50 per) to blame retailers for this and are 56 per cent more likely to blame other customers.
  • 63 per cent of Australian customers say their personal finances are “not so good” or “poor” at this time, reflecting the real need for retailers to leverage their customer data to price and promote items accordingly.

“We can’t know for sure what will happen as restrictions ease, but COVID-19 has certainly helped to reinforce the relationship between customers and their local store experience. Retailers need to prepare for the new normal and ensure the best ongoing customer experience to maintain and secure that loyalty,” Gleeson-Long said.

“In addition, retailers must continue to recognise and protect their dedicated employees, all while providing relevant and personalised communications, ranges and offerings to ensure they are meeting their customers’ changing needs.”

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