Survey: Most consumers say price more important than brand
Three-quarters of shoppers say they would switch brands if a product is offered at a lower price, a sign that consumers are continuing to spend diligently.
That’s according to the new “State of Spend” report from digital promotion platform Ibotta. Per the study, 72% of shoppers say the economy has directly impacted their grocery spending habits, with a majority trading down to lower-priced alternatives in the face of rising grocery costs. Seventy-five percent of respondents said they would try a different brand if it is offered at a lower price than what they usually buy, and 64% agree that price is more important than brand name.
Ibotta’s survey found that shoppers reported spending an additional $302 on food and beverage essentials over the past year, which caused decreased spending in more discretionary categories like personal care/beauty (down $9), pet care (down $5), health, (down $5), and cleaning/household (down $3). Within food and beverage, the categories with the biggest declines in year-over-year purchases may also be seen as discretionary: alcohol (down 8%), plant based meat/dairy (down 5%), snacks (down 4%) and frozen foods (down 3%).
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Shoppers are also making more infrequent trips to the store, with fewer people shopping at least once a week (80% in 2023, down to 77% in 2024), with the presence of a rewards or loyalty program being the top deciding factor for shoppers when choosing a grocery store. While average monthly spend on household staples is flat year-over-year, 60% of consumers believe they are spending more this year compared to last. Nearly three-quarters (70%) say inflation has negatively impacted their household finances in the past 12 months.
For retailers, digital promotions lead spending growth across tactics (up 26% from 2023), with a marked rise in use for early-stage engagement specifically (up 13% from 2023). However, there is a 12 point disconnect between how marketers and consumers perceive the positive brand value of promotions (64% and 76% respectively), which Ibotta says suggests marketers may be underestimating their power. Seventy percent of brand marketers agree that the biggest threat to their brand is private label.
“This year’s State of Spend highlights the ongoing consumer struggle to overcome the compound effects of years of high grocery prices and stagnant shopper budgets, leading to growth in lower-cost private label brands,” said Bryan Leach, founder and CEO of Ibotta. “If shoppers take an exit ramp to a private label product, brands understand that the cost of inaction is steep. As they think strategically about how to win consumers back, digital promotions have proven to be one of the most cost effective and immediate solutions for growing market share.”
Ibotta’s survey of 5,400 U.S. consumers was fielded July 24 – Aug. 8, 2024.
