Economic Trends and Marketing Insights: 5 Stats for a Productive Week

Grocery inflation returns to ‘more normal’ levels

Grocery price inflation dropped to 2.4% in the four weeks ending on May 12, its lowest level since October 2021, which is considered a more typical rate. This marks the fifteenth consecutive month of grocery price inflation decreasing, now standing just 0.8 percentage points above the 10-year average of 1.6% from 2012 to 2021.

With the slowing inflation rate, shoppers usually tend to move away from inflation-driven behaviors such as trading down. However, the continued success of discount retailers indicates that these behaviors are still persistent.

"Shoppers may take some time to adjust their spending habits after experiencing nearly two and a half years of price increases," says Fraser McKevitt, head of retail and consumer insight at Kantar.

Despite the challenges, own-label products are holding strong. They are outpacing brand growth, accounting for more than half (52%) of total spending. Premium own-label ranges are also seeing growth, with sales up by 9.9% compared to last year.

Despite ongoing cost of living concerns, grocery sales increased by 2.9% in the four weeks leading up to May 12th. Kantar attributes this growth to the boost in sales during the early May bank holiday.

Looking ahead to the summer, sporting events are expected to continue driving sales, especially in categories such as alcohol, according to McKevitt.

"Beer sales soared during England's quarter-final match against France in the 2022 FIFA Men's World Cup, reaching the highest daily earnings of the year, excluding Christmas. The combination of sports events and warmer weather could bring a much-needed boost to the sector," according to Kantar.

Hospitality suffers as wet weather dampens sales in April

Sales in April for Britain’s top hospitality groups fell by 1.7% compared to last year, with the wet weather being the main reason for the decrease. This decline is a significant drop from the 5.2% growth seen in March, which was boosted by better weather and an early Easter. It marks the first year-on-year decrease since September 2022.

Sales in pubs saw a decrease of 1.5% in April. Bars experienced the biggest hit, with a 15.1% drop in sales compared to last year. Restaurants, on the other hand, had a slight growth of 1.2%. The on-the-go segment saw a decrease of 4.2%.

In terms of location, London had better performance with sales inside the M25 increasing by 0.3% from the previous year. However, sales outside of London dropped by 2.2%.

Karl Chessell, director of CGA by NIQ, notes that the hospitality sector faced challenges in April after experiencing 18 months of continuous growth. This shift in performance highlights the strong connection between weather conditions and sales. It also suggests that some consumers may have been saving their dining and drinking out experiences for special occasions and holidays such as Easter.

Maximum of five minutes of ads accepted by most consumers on streaming services

Research shows that as more ad-funded streaming TV subscriptions become available, most people are only willing to accept ads for less than five minutes per hour. A third of consumers (32%) prefer to see ads for a maximum of two minutes per hour, while a fifth (21%) are okay with three to five minutes per hour.

Only 9% of people are okay with having 6 to 10 minutes of ads per hour. Just 2% are fine with 16 to 20 minutes, and another 2% are okay with more than 20 minutes.

On the other hand, 18% of consumers are clear that they do not want any ads while streaming. This means they would not choose an ad-supported option at all.

Source: YouGov

Consumer confidence inches upward

The latest GfK Consumer Confidence Barometer shows that consumer confidence has risen for the second month in a row. This positive trend is a welcome change after a long period of stagnation, painting a brighter picture for the future.

The overall index score has increased by two points to -17, driven by a rise in four out of the five measures compared to the previous month. Consumer confidence has seen significant improvement since May last year, with a 10-point increase from -27.

The data for May was collected from consumers before news of the upcoming election and the current inflation rate, which recently dropped to 2.3% on 22nd May, its lowest level in nearly three years.

Over the last 12 months, people have become more hopeful about their own personal financial situation, with a one-point increase to -10.

Looking ahead to the next 12 months, the forecast for personal finances has risen by five points to 7. This marks a significant improvement from the -40 figure reported in September 2022.

Confidence in the general economic situation has improved over the past year, with a two-point increase to –39. Looking ahead, expectations for the general economic situation over the next 12 months have also risen, up by four points to –17.

Source: GfK

TV most popular device for watching video content

In Europe, TVs are the most popular device for watching video content, with 76% of people watching TV daily. Smartphones come in second place, with 64% of people using them to watch videos.

In the US, 74% of people watch videos on TV daily. Smartphones are tied for first place at 74%.

For both European and US viewers, PCs and notebooks come in third. However, more people in the United States (50%) use them compared to Europe (41%).

Tablets are also more popular in the US (46%) compared to Europe (31%).

Linear TV is still watched at least once per week by Americans (68%) and those in Europe (69%).

Streaming is a lot more popular in the US compared to Europe. US viewers are more likely to watch subscription-based video-on-demand and short-form videos online on a weekly basis. In fact, 77% of US viewers watch subscription-based video-on-demand, while only 68% of Europeans do the same. Additionally, 72% of US viewers watch short-form videos online weekly, which is higher than the 55% of Europeans who do the same.

When it comes to watching ad-funded streaming content, US consumers are also ahead. A whopping 62% of US consumers watch ad-funded streaming content, while only a quarter of Europeans do the same.

Source: RTL AdAlliance

Editor's P/S:

The article provides a comprehensive overview of recent trends in consumer behavior and the retail industry. One notable observation is the return of grocery inflation to more normal levels, indicating a potential easing of inflationary pressures. However, it's important to note that shoppers may still be adjusting their spending habits, with continued support for discount retailers suggesting a lingering impact of inflation concerns.

Another key finding is the decline in hospitality sales due to wet weather in April. This highlights the vulnerability of the sector to external factors and the importance of weather conditions for businesses that rely on outdoor seating or experiences. Additionally, the article sheds light on consumer preferences for streaming services, with most people willing to accept a limited amount of advertising (less than five minutes per hour) in exchange for free content. This trend is expected to shape the future of streaming subscriptions and advertising models.