Pricing & Out-of-Stocks: Staying on Top of Changing Consumer Behaviour

Published Oct 18, 2022

Laurence Vogel, Enterprise Account Director, CPG & Retail at Toluna, and Lucia Juliano, Head of Research, UK & NL at Harris Interactive

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In the latest wave of the Toluna Global Consumer Barometer, fielded in September 2022, we found that life satisfaction among consumers has improved year-over-year. However, that improvement is mitigated by a downturn in consumer confidence in spending (-3% YoY). Additionally, concerns about job security remain, and over 40% of global consumers report that they have less money now than before the pandemic.

Despite some optimism amongst consumers across the globe—albeit varying from one market to the next—the reality is that the cost-of-living crisis has hit hard. Four in five (80%) global consumers are concerned with rising prices and inflation, and nearly half (48%) expect to spend more on groceries in the next three months. When asked what they view as the most important factors in choosing grocery products over the next few months, over 75% of global consumers cited price as the most important, followed by quality. With price driving decision-making, consumers are most likely to spend less or trade down on non-essentials such as snacks, alcohol, and health and beauty purchases.

Given how important pricing is in the supermarket aisles today, we thought we would run a pricing test against Lurpak. This followed the summer news of Arla increasing prices on packs of spreadable butter to £9.00, as well as the decision of some supermarkets to add security tags to the product.

In general, the price of butter has risen due to a multitude of price factors, including soaring prices for energy, rapeseed oil, fertiliser, and animal feed. But Lurpak has increased in price by 33% versus 19% across the category. So, what do consumers think of the huge increases in the price of Lurpak?

Half of Brits said they had seen media coverage about the price of Lurpak, and six in ten said they are now less likely to purchase it. From the pricing tests we conducted, it was clear that £5 is the upper price point barrier in consumers’ minds. This is where we see acceptability drop from 41% at £4.90 to 21% at £5.00. To back this up, we conducted an additional pricing test at different price points, which highlighted notable differences in purchase intent – with 23% at £5.00 versus 45% at £4.00.

Laurence Vogel, Enterprise Account Director for CPG & Retail at Toluna, says, “To get it right from the outset, it is important to plan and test for pricing changes. This will enable you to anticipate how consumers will respond, measure price expectations and reactions to different price points, and understand how demand is impacted at different price points. How can you do this? By using quick, simple, and proven pricing research techniques and ensuring pricing decisions are considered against the backdrop of consumer sentiment.”

In addition to getting your price right, it’s critical to manage perceptions and consumer behaviours when it comes to out-of-stocks. Alongside the Lurpak pricing study, we asked consumers to recall any out-of-stock experiences from a recent grocery shopping trip. We found that over half of shoppers had experienced an out-of-stock issue in the past week. This has led to high frustration levels amongst those consumers (84%), and 50% now feel negatively about the brand that was unavailable. What actions did they take as a result? About one in three bought a different brand (34% lost to competitors), while a similar proportion chose not to buy a product at all (34% lost sales for the retailer). And the out-of-stock issue isn’t confined to one or two categories; it is impacting all supermarket categories in all major retailers.

“Considering the impact of out-of-stock items will help you maximise on your competitors’ shortfalls and ensure you do not lose out.” said Lucia Juliano, the UK Head of Research at Toluna & Harris Interactive.

Toluna can support you by providing access to our agile research templates in the Toluna Start platform, ensuring you get the results you need in hours. With results this quick, you will be able to adapt and stay ahead of your competitors in today’s constantly evolving marketplace.

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