That inflation, especially high in the food sector, is causing a significant loss in the purchasing power of families, you already know from your own experience. On the contrary, supermarkets have shown positive billings at the end of the year with a growth of 4.5%, according to the latest report from the consultant Kantar. And it is that the great distribution has transferred the inflation, almost as it is, to the consumers. However, the situation, as Kantar’s Worldpanel division assures, could turn against it in the coming months due to a phenomenon known as “downtrading”.
This English word, which we could translate as “bargain to the bottom”refers to a series of behaviors with which consumers manage to make the shopping cart cheaper.
As César Valencoso, an expert in Mass Consumption at Kantar, explains, “the consumer’s reaction to the price does not follow mathematical rules, but psychological onesso shoppers react to inflation with global savings moves, such as reducing the amount of food they throw away, cutting back on fresh produce, and opting more for basic category segments and private label.” .
That is to say that the down trading causes reduced revenue and margins in the whole chain. And, although the main victims are the brand manufacturers, this consultancy assures that 2023 will be marked by the fight of the chains against this phenomenon.
According to Kantar, the way they will do it will be by finding the correct balance between quota and margin. Or, to put it more clearly: avoiding lowering prices too much to continue passing all the inflation on to consumers. You may have already been practicing “downtrading” without knowing it, but now you have named what we as consumers can do to reduce the impact of inflation on our pockets.
Cover photo | Priscilla DuPreez
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