More than two-thirds of shoppers thought Brexit would bring a rise in grocery prices. Only 2% thought grocery prices would fall after the UK left the EU.
A further 64% thought Brexit would adversely affect the UK economy in the short term, with 16% considering it would have a positive impact.
Nielsen’s senior UK shopper research manager Sophie Jones said the result was predictable. “The immediate concerns come of no surprise, however, there is typically a six month lag in any change to consumer spending following a change to sentiment.”
The state of the economy was now consumers’ top concern over the next six months, with 55% of those survey identifying it as one of their top worries.
The research also revealed consumers were planning to restrict spending, with some considering switching to cheaper brands or products.
Change the supermarket
More than a third of shoppers planned to change the supermarket where they currently buy most of their groceries.
Nearly a half (41%) of those surveyed planned to change their spending habits to save on household expenses. Younger shoppers, aged between 18 and 34, said they were more likely to change their shopping habbits.
Switching to cheaper grocery brands and spending less on new clothes were the most popular ways to save money. That was closely followed by cutting down on takeaway meals.
Just under a third (31%) of shoppers planned to buy more British groceries. But 4% planned to buy less.
But Jones said the results of the survey should be interpreted cautiously.
“It’s important to be aware that these are just early sentiments at this moment in time that could look very different in a few months. The Third Quarter Consumer Confidence Index will be the real litmus test of spending intentions.”
The triggers to any change in spend will be an increase in food inflation or changes in disposable household income, which might occur next year, she added.
Short-term volatility
Jones said: “Short-term volatility is to be expected. We know shoppers – even since the recession – have held onto conservative spending habits. This is likely to be reinforced more heavily in the short term.
“Price-led retailers are those most likely to benefit from shoppers changing retailer or brands to save money, which includes the discounters, Aldi and Lidl.
“They currently hold 11.4% market share and we expect them to push even harder and, thus, we anticipate more competition between retail channels for shoppers’ spend.”
She has advised food retailers to ensure they have the right price and promotional strategies in place. However, she said the current supermarket price war is expected to continue, which will mitigate any immediate upward pressure on prices this year.
“It’s important to be aware that these are just early sentiments at this moment in time that could look very different in a few months.
“The Q3 Consumer Confidence Index will be the real litmus test of spending intentions,” she added.
The research surveyed 417 respondents on Wednesday June 29.
Meanwhile, UK grocery sales were predicted to hit £197bn within the next 15 years, according to grocery think-tank IGD.
How Brexit will change shopping habbits
- 37% plan to change their favourite supermarket
- 31% plan to buy more British groceries
- 4% plan to buy less
- 67% of shoppers think Brexit will mean a rise in grocery prices
- 2% think they’ll go down