From fresh to frozen: How has the cost of living crisis changed shoppers' habits?

Chris Choi reports on the how the cost of living crisis is affecting shopping in the UK

Shoppers are choosing budget supermarkets, switching to cheaper own-brand products and opting for frozen over fresh food as they seek out better value for money amid the cost of living squeeze.

Budget supermarket Aldi recently edged out Morrisons to become one of the UK’s 'Big Four' supermarkets for the first time, adding further pressure on companies who have come under increasing pressure from the German discounters.

It comes as supermarket giant Tesco reveals falling half-year profits amid “significant” inflation pressures, and a return in food shopper habits to those seen before the pandemic, when supermarket spending escalated.

As food price inflation hits its highest rate on record, with shoppers now paying 10.6% more than they were a year ago, how has this shaped the way we shop?

How are our shopping habits changing?

Customers are buying less on each shopping trip - but shopping more frequently - switching to cheaper own-brand products and opting for frozen over fresh, according to Tesco chief executive Ken Murphy.

On the supermarket's half-year results media call on Wednesday morning, Mr Murphy said: “We are seeing obviously, some reversal of pre-pandemic behaviours.

"So we are seeing more frequent shops, smaller basket sizes, and obviously less shopping online and that is partially expected, and I think partially people managing to a budget.

"We've also seen people trade down to our own brand propositions and we've seen some trade from fresh to frozen. So they would be the key trends."

People were also buying fewer non-food and clothing sales as part of their cutbacks, the group found.

Shoppers are also switching their preferred supermarket, moving to stores such as Aldi and Lidl.

A survey from money-saving site SellCell found 56.8% of UK shoppers said they would opt for a budget supermarket.

How are supermarkets responding to these changes?

Supermarkets have responded to rising inflation and the pound's volatility with price-matches and price-locks, as well as expanded value ranges.

They are also pushing promotions.

But there are calls to do more.

Consumer watchdog Which? called on supermarkets to provide clear and comparable pricing and ensure affordable budget ranges are available in areas where they are needed most.

How has our non-food shopping changed?

It is not households' shopping baskets that are changing. Consumers have also been cutting back on reducing discretionary spend for the past few months.

According to consultancy EY's Future Consumer Index, consumers were changing their shopping patterns to reflect inflationary pressure even before the latest crisis.

Nearly half (49%) of consumers were buying less clothing, shoes and accessories while 7% had stopped purchasing altogether.

In consumer electronics, but 41% are purchasing less and 14% are stopping purchasing altogether, the latter figure the highest across all consumer categories.

The survey from SellCell found 38.9% of people were considering cancelling subscriptions to streaming and pay TV services from the likes of Netflix and Sky, and 38.4% of people said they will buy less clothing.

How has inflation changed what we eat and where?

Over half of people (52%) surveyed for SellCell, said they would reduce the number of times they go out, and 51.4% of people will ditch the meals out and takeaways.

And another survey suggests the traditional Sunday roast is under threat, with a quarter of people saying they are now less likely to prepare one.

Nearly a fifth of people surveyed say they will no longer use their oven at all as they respond to the cost of living crisis.

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Consumers are likely to seek affordable rather than sustainable products

Writing in the Conversation, Jason Sit, a senior lecturer in the Portsmouth Business School at the University of Portsmouth, said consumers feeling the pinch are less likely to buy environmentally-friendly products, such as plastic-free razors, as they seek affordability over sustainability.

Will our Christmas spending be affected?

The majority of people in Britain (80%) are concerned about spending this Christmas, according to new research from customer insights platform, QuMind.

A recent survey from the platform found 60% were expecting to spend less on Christmas this year, with one in 10 (11%) reporting they will reduce festive season spending by 50% or more compared to last year.

At least half say they will spend less this year on presents - 46% say they expect to spend less on toys.Mr Murphy said: “We think it’s going to be a Christmas that people are going to want to celebrate but will want to celebrate in a more affordable way.”