Consumers now locked into long-term frugality no chance
To suggest consumers have made a shift in the way they shop eschewing expensive goods and adopting a more frugal cost-conscious approach is stating the obvious. By Glynn Davis, City editorWhat seems less obvious to me is the assertion from certain respected parties that consumers have made this switch for the long-term and will not be returning to their old ways.
Among them is food industry experts IGD that has just released areport which found that 75 per cent of shoppers who had made changes to the way they shop for groceries as a result of the recession will be sticking with their new habits even when the economy recovers.
Even the chief executive of Wal-Mart recently took the same line when he stated that the worldwide economic crisis had “led to a fundamental shift in consumer attitudes and behaviour”.
This all seems rather odd and smacks of similar statements that were made during the last downturn and probably the one before that. In fact this is the feeling that pervades during any recession when you can't see the light at the end of the tunnel.
The contra view is held by Argos, which has been attracting more affluent shoppers looking for a bargain, with its managing director Sara Weller under no illusion that many of these people will not be long-term Argos shoppers. Her aim is to simply retain a number of them by offering good service so that they become loyal shoppers - but no way would Weller expect to retain anything like 75 per cent of these people.
When speaking at the Allegra UK Restaurant Leader Summit in London this week Mark Phillips, chief executive of restaurant operator Paramount, suggested “austerity is not a permanent state of being” and recalled the 'Loadsamoney' type characters of the 1980s that disappeared in the late 90s but a similar mindset must have returned again as we still ended up with conspicuous consumption and greed in the 2000s.
Whatever UK consumers and the chief exec of Wal-Mart say, we will absolutely make a return to times when consumers spend with abandon. The only uncertainty is when.
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