Inflationary concerns continue to loom large in consumers’ minds.
PwC Canada’s 2024 Voice of the Consumer survey found that 44 per cent of respondents ranked inflation as the top threat facing the country, eclipsing economic volatility and health risks, despite the rise in the cost of living gradually slowing.
Other key findings include:
- More than four in 10 (43 per cent) Canadian consumers would switch to a competing brand that offers better value for their money;
- Respondents ranked retail and consumer goods companies third for trustworthiness, behind healthcare, hospitality and leisure sectors;
- 35 per cent of Canadian consumers say self-checkouts would encourage them to shop in physical stores;
- Despite the high cost of living, two-thirds will pay an above-average price for products that are locally produced, manufactured with a lower carbon footprint or have other sustainability characteristics; and
- Canadian consumers will pay a sustainability premium of 6.9 per cent, compared to 9.7 per cent globally. One in five would pay a premium of 10 per cent or more.
Elisa Swern, PwC Canada’s National Consumer Markets Leader, said Canadian consumers tend to be pretty loyal to brands.
“In this survey, given inflationary pressures, they said they will switch brands based on pricing and promotion which is pretty rare compared to what we’ve seen,” she said.
“I think that value is not going to go away. Consumers’ perception of value is not going to go away. As interest rates start to go down and we start to see a bit of the loosening of the belt from a discretionary spending perspective, we’ll start to see maybe a lessening of it. But I think it’s here to stay. It’s a bit of a wakeup call for all retailers to really understand what value means to their customers and how they achieve that.
“There has to be a value to why there’s a price premium whether it’s luxury goods or the type of services that you’re having or the differentiation in your product. But still I think consumers are pretty smart now especially with the use of social media and being able to compare everything all the time.”
Swern said trust is even more important than it’s ever been in today’s retail industry.
“What’s important is that companies are transparent. Companies make mistakes just like people make mistakes. But it’s about what you’re doing about it, how you’re taking care of things and that you’re being transparent about them. Like cyber incidents for example. Disclosing to the public that you have a cyber incident, disclosing to the people who are impacted by it that their data was impacted by it and what it could mean, what they should be doing, what they should be thinking about,” she said.
“That shows transparency and trust. Does it make consumers nervous and uncomfortable, yes? And you see that also in the data. Consumers are starting to pay attention a lot more to who they’re giving their data to and what they’re sharing.
“Trust is important when consumers are going to share their data. In particular they want to share it with a company who they feel they’re going to get some benefit from and companies that they trust.”
Swern said this year’s survey also indicated that Canadian consumers would be willing to pay more for sustainability.
“But I think it will come down to the value that they’re seeing in it and how the value of the companies and the trust in the companies align to their own values,” she said.
“When you look at trust and you look at what’s important to consumers, sustainability and the E part on ESG becomes more relevant and important, customers are going to want to deal with companies who they trust, who they feel are transparent with that data and that are doing things that make sense, from both sides of the coin. The consumer wants to feel trust and wants to work with a company where they see these activities underway. For the retailer or the packaged goods company, they also have to be thinking what the value is for them. Otherwise it’s just an additional cost onto their cost of goods.”
