Consumers in Canada Less Loyal to Brands in Grocery Stores Amid Inflation [Study]

Date:

Share post:

Grocery prices are hitting everyday shoppers where it hurts these days: right in the wallet.

And few things influence shopper habits like price, according to a report by Field Agent, a company that leverages crowdsourcing and mobile technology to collect retail audits and conduct mystery shops for retail operations.

“The takeaway for CPG (Consumer Packaged Goods) brands: shoppers are increasingly open to purchasing from competitors. And when loyalty is low, every sale counts,” said Jeff Doucette, General Manager, Field Agent Canada.

“But shoppers aren’t the only ones tightening their belts. As sales dip for many brands, the cost of boots on the ground to fix pricing errors and check out-of-stocks can feel overwhelming. But here’s the good news: low-cost, high-yield solutions for these challenges (and many more) exist to help every CPG brand weather inflation. Companies of all sizes, from Fortune 500 juggernauts to mom-and-pop brands, trust Field Agent to inspect prices, double-check out-of-stocks, and even boost e-commerce sales. All with just a few clicks.”

Image: Field Agent Canada

In Canada, the Consumer Price Index rose 7.6 per cent on a year-over-year basis in July, down from an 8.1 per cent gain in June. The deceleration was a result of slower year-over-year growth in gasoline prices, according to Statistics Canada.

The federal agency said prices for food purchased from stores increased more on a year-over-year basis in July (+9.9 per cent) than in June (+9.4 per cent). Prices for bakery products (+13.6 per cent) continued to rise at a faster pace as wheat prices remained elevated. Higher input costs and global supply uncertainty related to the Russian invasion of Ukraine continued to put upward pressure on global wheat prices amid an already constrained supply, explained StatsCan.

Other food items also exhibited faster price growth, including non-alcoholic beverages (+9.5 per cent), sugar and confectionery (+9.7 per cent), preserved fruit and fruit preparations (+10.4 per cent), eggs (+15.8 per cent), fresh fruit (+11.7 per cent), and coffee and tea (+13.8 per cent), it added.

Field Agent asked 2,739 shoppers about how inflation has influenced and altered their grocery shopping habits over the last three months. 

Shoppers Drug Mart, Winnipeg, Manitoba (Image: Field Agent Canada)

“From a retailer perspective, we’ve really got to think about having those alternate options for people that are on budgets,” said Doucette. 

“If you have $200 to spend on groceries, that’s all you have. So finding options of smaller pack sizes, formats that can help people save a little bit of money from an absolute price point basis. I think that’s the thing we’ve been missing in so many of the conversations about inflation. There’s so many Canadians that their budget for groceries is a fixed dollar amount. It’s not a flexible amount necessarily.

“So if they have smaller pack sizes they can still buy affordably. And private label brands I think are going to be important even though they’re also under pricing pressure and price increases as well. It’s a complicated story but consider that overall consumer budget as a dollar amount and try and help them drive value.”

The survey said 95 per cent of shoppers surveyed are well aware of higher prices, and over a quarter report paying “much higher” prices for their groceries. It’s a pain point many can’t afford to ignore.

Sobeys in St. John’s (Image: Field Agent Canada)

The survey found that 12 per cent of these shoppers report an increase in grocery stock, and about 31 per cent say they haven’t noticed any significant change at all. But a majority (57 per cent) continue to perceive a drop in grocery stock compared to three months ago.

“Why is this an important question for CPG brands? Simply put, customer loyalty drops with the purchasing power of their dollar. Translation: if your product isn’t on-shelf, penny-pinching shoppers are more than happy to swap for a competitor—especially if they’ll save a few bucks doing so,” added Doucette.

The report also found that 53 per cent of shoppers said they are less likely to grab an unplanned treat while grocery shopping and 19 per cent are much less likely to do so. 

“For shoppers, impulse purchases are an afterthought. But for many CPG brands, they’re the prize-winning bread and butter. When a dollar just doesn’t go as far as it used to, frivolous purchases are the first to be kicked to the curb,” explained Doucette.

Dollarama on King West (Image: Field Agent Canada)

“Inflation isn’t only affecting what goes into physical shopping carts—digital carts are also feeling the pressure. 58 per cent of our shopper sample said they buy groceries online at least occasionally, and seven per cent make such purchases at least once a week. It’s a dirty little secret, but what’s in-stock on grocery store shelves may not be available on retailer apps for pickup or delivery. 

“A majority of shoppers have noticed a downward trend in availability as they shop for groceries online or in-app. For CPG brands, that means more substitutions or missed sales.”

The report also found that 82 per cent of shoppers say they’ve adjusted their grocery-shopping habits due to inflation. It said 74 per cent of shoppers say they’re switching brands to save costs, and 75 per cent are buying different groceries altogether (less meat, for example). Also, 23 per cent say that inflation has even influenced them to pick up a membership at a warehouse club like Costco.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

More From Retail Insider

Innovative Direct-to-Consumer Furniture Startup CouchHaus Opens 1st Physical Retail Space in Vancouver [Interview]

The husband-wife team's modular furniture became so popular online that they are opening their own physical store, allowing customers to see the product-in person.

Canadians Look to Make Major Purchases in 2024 Despite Economic Uncertainty: Survey

Economic uncertainty isn't stopping Canadians from planning major purchases in 2024 according to a study, potentially giving retail a boost depending on the demographic.

Canada’s Agri-Food Sector Lacks Vision as Consumers Struggle with Grocery Prices [Op-Ed]

Canada's lack of cohesive vision and strategy for its agri-food sector, despite significant budget allocations, is stark contrast to the decisive approach evident in U.S. agricultural policy says Sylvain Charlebois.

Flexible Work Company ‘LAUFT’ Discusses Expansion Plans and New Government Collaboration [Interview]

Founder Graham Wong discusses the Canadian company's plans for new locations, enhanced spaces for events and content creation, and a future in places such as airports and hotels.

Ice Bath Spa Concept ‘Othership’ Opens 2nd Toronto Location with Expansion Plans for Major Markets in Canada and NYC [Interview]

The company's co-founder discusses the concept that began in his back yard in 2019, which is now a big business with a new Yorkville location and plans for Manhattan and other urban centres.

Anatomy of a Leader: Peter Mammas, President and CEO, Foodtastic

The man behind the food empire got started in Montreal where he wanted to be a pilot, then an architect. He eventually worked his way up in the world of foodservice, where he found his passion.

Nostalgia vs Reality: Exclusive Poll Shows Canadians Warm to Zellers’ Return but Hesitate to Shop One Year After Relaunch

Zellers relaunched a year ago as shop-in-stores at Hudson's Bay, and a poll done for Retail Insider shows that Canadians' think the current offerings fall short.

Cracking the Newcomer Code: Study Urges Canadian Retailers to Adapt for Inclusivity as Immigrants Reshape Retail Trends [Feature]

Making newcomers feel at home could mean increased sales for retailers. Ian Large of Leger says retailers should collaborate with communities as Canada's population changes.

Italian-Themed QSR Chain Fazoli’s Announces Major Expansion into Canada with 25 Locations Planned [Interview]

The chain could open even more locations according to its development officer, who discusses Fazoli's success being rooted in quality ingredients and speedy service.

Toronto-Based Fashion Designer Adam X Discusses Inspiration, Retail and Designing for the Future [Video Interview]

Craig and Adam X discuss the the founding and ethos of Adam X Atelier, a Toronto-based haute couture fashion brand which is rare to find in Canada.

Swatch Opens Flagship Store in Downtown Vancouver as it Expands Across Canada [Photos]

It's the 12th store in Canada for the popular Swiss watch brand, which almost doubled its store count in this country in less than a year.

Economic Strains Dampen Montréal’s Retail Growth, But Luxury and Transit Projects Could Spark Revival: JLL Report

Montreal retail has struggled recently and leasing activity has been particularly slow downtown, while a new luxury mall and a growing transit network could help things this year.

IKEA Canada Launches ‘Second-Hand Tax’ Initiative in Protest of Government Policies [Interview]

Ikea dropped the tax on its 'as-is' marketplace, stating that second-hand goods should not be subject to the same taxes as new products.

Significant Variances in Food Price Changes Not Reflected in Statistics Canada Numbers [Op-Ed]

Sylvain Charlebois says that StatCan numbers on food inflation do not reflect the reality of what consumers are seeing at the grocery store.

US-Based Women’s Fashion Brand Windsor Announces First 5 Canadian Stores, Plans National Expansion [Interviews]

The fashion brand is expected to be a runaway success in Canada, with an existing customer base and a void in the market.

Chop Steakhouse Set to Open in Downtown Toronto, Continuing an Influx of New Restaurants to the Financial District [Feature]

Chop Steakhouse is joining a number of new restaurants and dining options that have opened recently in the Financial District, as the area starts the journey back from a pandemic that took a huge toll on the core.

Virtual Reality Arcade Concept ‘Ctrl V’ Expanding in Canada and the US Following Pandemic Setback [Interview]

The world's first and largest VR arcade franchise is opening new locations across Canada and the US, seeking spaces of about 4,000 square feet.

Good Neighbour ‘Lifestyle Department Store’ Expanding with a New Flagship in Toronto’s Summerhill [Interview]

The unique retail concept that launched 10 years ago in Leslieville has grown its offerings with its newest location catering to locals with a range of produces and a beverage lounge.

Anatomy of a Leader: Ian Rosen, President and COO of Harry Rosen

Rosen discusses his life up to becoming head of the luxury menswear retailer, and discusses what's been happening with the family as new leadership emerges.

Mid-Market Retailers in Canada Navigating Challenges and Opportunities as Consumers Shift [Op-Ed]

Jared Gordon discusses challenges facing mid-market retail, such as declining consumer interest and competition from discount and luxury sectors. Mid-market retailers need to adapt to survive he says.

RECENT RETAIL INSIDER VIDEOS

Advertisment

Subscribe to the Newsletter

Subscribe

* indicates required

RECENT articles

Innovative Direct-to-Consumer Furniture Startup CouchHaus Opens 1st Physical Retail Space in Vancouver [Interview]

The husband-wife team's modular furniture became so popular online that they are opening their own physical store, allowing customers to see the product-in person.

Canadians Look to Make Major Purchases in 2024 Despite Economic Uncertainty: Survey

Economic uncertainty isn't stopping Canadians from planning major purchases in 2024 according to a study, potentially giving retail a boost depending on the demographic.

Canada’s Agri-Food Sector Lacks Vision as Consumers Struggle with Grocery Prices [Op-Ed]

Canada's lack of cohesive vision and strategy for its agri-food sector, despite significant budget allocations, is stark contrast to the decisive approach evident in U.S. agricultural policy says Sylvain Charlebois.

Flexible Work Company ‘LAUFT’ Discusses Expansion Plans and New Government Collaboration [Interview]

Founder Graham Wong discusses the Canadian company's plans for new locations, enhanced spaces for events and content creation, and a future in places such as airports and hotels.

Ice Bath Spa Concept ‘Othership’ Opens 2nd Toronto Location with Expansion Plans for Major Markets in Canada and NYC [Interview]

The company's co-founder discusses the concept that began in his back yard in 2019, which is now a big business with a new Yorkville location and plans for Manhattan and other urban centres.

Anatomy of a Leader: Peter Mammas, President and CEO, Foodtastic

The man behind the food empire got started in Montreal where he wanted to be a pilot, then an architect. He eventually worked his way up in the world of foodservice, where he found his passion.

Nostalgia vs Reality: Exclusive Poll Shows Canadians Warm to Zellers’ Return but Hesitate to Shop One Year After Relaunch

Zellers relaunched a year ago as shop-in-stores at Hudson's Bay, and a poll done for Retail Insider shows that Canadians' think the current offerings fall short.

Cracking the Newcomer Code: Study Urges Canadian Retailers to Adapt for Inclusivity as Immigrants Reshape Retail Trends [Feature]

Making newcomers feel at home could mean increased sales for retailers. Ian Large of Leger says retailers should collaborate with communities as Canada's population changes.

Italian-Themed QSR Chain Fazoli’s Announces Major Expansion into Canada with 25 Locations Planned [Interview]

The chain could open even more locations according to its development officer, who discusses Fazoli's success being rooted in quality ingredients and speedy service.

Toronto-Based Fashion Designer Adam X Discusses Inspiration, Retail and Designing for the Future [Video Interview]

Craig and Adam X discuss the the founding and ethos of Adam X Atelier, a Toronto-based haute couture fashion brand which is rare to find in Canada.

Swatch Opens Flagship Store in Downtown Vancouver as it Expands Across Canada [Photos]

It's the 12th store in Canada for the popular Swiss watch brand, which almost doubled its store count in this country in less than a year.

Economic Strains Dampen Montréal’s Retail Growth, But Luxury and Transit Projects Could Spark Revival: JLL Report

Montreal retail has struggled recently and leasing activity has been particularly slow downtown, while a new luxury mall and a growing transit network could help things this year.

IKEA Canada Launches ‘Second-Hand Tax’ Initiative in Protest of Government Policies [Interview]

Ikea dropped the tax on its 'as-is' marketplace, stating that second-hand goods should not be subject to the same taxes as new products.

Significant Variances in Food Price Changes Not Reflected in Statistics Canada Numbers [Op-Ed]

Sylvain Charlebois says that StatCan numbers on food inflation do not reflect the reality of what consumers are seeing at the grocery store.

US-Based Women’s Fashion Brand Windsor Announces First 5 Canadian Stores, Plans National Expansion [Interviews]

The fashion brand is expected to be a runaway success in Canada, with an existing customer base and a void in the market.

Chop Steakhouse Set to Open in Downtown Toronto, Continuing an Influx of New Restaurants to the Financial District [Feature]

Chop Steakhouse is joining a number of new restaurants and dining options that have opened recently in the Financial District, as the area starts the journey back from a pandemic that took a huge toll on the core.

Virtual Reality Arcade Concept ‘Ctrl V’ Expanding in Canada and the US Following Pandemic Setback [Interview]

The world's first and largest VR arcade franchise is opening new locations across Canada and the US, seeking spaces of about 4,000 square feet.

Good Neighbour ‘Lifestyle Department Store’ Expanding with a New Flagship in Toronto’s Summerhill [Interview]

The unique retail concept that launched 10 years ago in Leslieville has grown its offerings with its newest location catering to locals with a range of produces and a beverage lounge.

Anatomy of a Leader: Ian Rosen, President and COO of Harry Rosen

Rosen discusses his life up to becoming head of the luxury menswear retailer, and discusses what's been happening with the family as new leadership emerges.

Mid-Market Retailers in Canada Navigating Challenges and Opportunities as Consumers Shift [Op-Ed]

Jared Gordon discusses challenges facing mid-market retail, such as declining consumer interest and competition from discount and luxury sectors. Mid-market retailers need to adapt to survive he says.