Asia Article: Ready, Steady, Shop! Vol. 3
How is inflation reshaping your category?
With prices still rising faster than wages, shoppers are continually making tough decisions to manage their household grocery budget. Kantar’s Worldpanel division can now reveal exactly how these decisions are impacting categories across FMCG.
By continuously tracking what shoppers are putting in their baskets, and where they are shopping, it is possible to identify and quantify the actions being taken in response to rising prices:
How inflation is impacting and reshaping your category is clearly revealed once these individual responses are summed up for the millions of households in each market.
Let’s have a look at an example below from Indonesia, where Total FMCG inflation has fallen to 6% in Q4 22 from a peak of 12% in Q2 22. What is immediately apparent is that Indonesian shoppers have absorbed a lot of the price increases, as shown by the yellow bars. Crucially there hasn’t been a net drop in FMCG volumes, in fact category repertoires have increased (blue bars). Where Indonesian shoppers are trying to offset rising prices is via downgrading, actively seeking out lower priced products than they have been buying previously. One concern for the industry is that this downgrading trend is increasing despite the rate of inflation cooling off.
It is vital that manufacturers and retailers have a clear view of the shopping decisions reshaping their priority categories, and take a shopper-centric approach to decision-making relating to price increases, promotional support, assortment, innovation etc.
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Senior Marketing Manager - Kantar, Worldpanel Division Thailand & Malaysia
- Send a messageChivanon Piyaphitakskul