Aussies are ditching their favourite brands in droves in response to the cost-of-living crunch.
Price is increasingly the driving factor at the checkout, outweighing considerations around brand loyalty, sustainability and quality, according to new data from Emersys, a division of software giant SAP.
The Emarsys Customer Loyalty Index 2023 reveals a majority of Australian households are shunning their favourite brands, with cost cited as the major factor in the decision.
The global survey questioned 2000 shoppers in Australia, the US, UK and Germany. A move towards cheaper brands was recorded in all countries, but none so strongly as Australia (63 per cent here versus a 49 per cent global average).
Why are we switching brands?
At home, interest rate rises, rampant inflation and a widespread dip in consumer confidence are all weighing heavily on the economy.
Joanna Milliken, Emersys CEO, told The Australian that brand loyalty is often the first thing to go when purse strings need to be tightened.
“Given the state of the world and our economic conditions, consumers don’t have a choice about being loyal to a product,” she said.
“They are motivated much more when push comes to shove to make decisions that are economical for them, and they’re not going to compromise on price when times are tough.
“We’re seeing people say they might be very values-driven and want to buy from a certain brand because it might be sustainable, but inflation means they can no longer afford to be pay a premium that they one might have been able to,” Ms Milliken said.
Effect of inflation
Recent Consumer Price Index (CPI) figures show inflation has been rising steadily over the past few years, but perhaps has hit its peak.
The CPI is a broad measure of inflation, but doesn’t always give the complete picture.
The Australian Bureau of Statistics (ABS) also publishes a number of separate ‘living cost indices’ that break down consumer behaviour even further, and these show there is still a lot of pressure on consumers.
Over the year to June 2023, living costs of employees (anyone working more than one hour per week) rose by 9.6 per cent but costs for self-funded retirees rose by 6.3 per cent and for age pensioners by 6.7 per cent.
The main reason for the difference between the groups was that interest rates increased and employees are more likely to have a mortgage than are retirees.
Over the same period, the CPI rose just 6 per cent, making inflation look tamer than consumers have been experiencing.
So while the news might be telling you inflation is dropping, this is why it may still feel like everything is too expensive.
The September quarter CPI figures are due out tomorrow.
Have you switched your regular brands for cheaper alternatives? Is there anything you would never switch? Let us know in the comments section below.
Also read: Add up the savings, room by room
I am 78 and fully retired 7 years ago in a comfortable position.
Family sickness blew the hopes and dreams away.
The biggest worry for me is that the policies the federal Govt are introducing are not policies for a higher interest rate economy.
Nor does it seem he or the treasurer is listening or paying other than lip service to what the Australian people want the Govt to do.COST of LIVING.
All that wasted money and time on a complicated VOICE, if one reads the full statement.
This Govt just listens to arguments supporting WOKE agendas.
Australians spoke in the referendum as a protest vote against the direction the Govt is taking the country. Into hardship and poverty..Concentrate o matters that people care about and tell cabinet to make a difference to peoples lives.
Too many ideologies being preached by his members.
Cheers
NOT that word “woke” again as I hear that whilst here in pommyland and always by right wing Tories who do not possess a modicum of compassion or empathy . You probably fall into that category and are no doubt a big Liberal supporter and maybe admire such people as Morrison , Abbott etc who i despise although I am ashamed to admit I was once a Liberal until I saw what these characters were all about and under influence of Murdoch who I think still controls about 75% of the press in OZ . No wonder the Liberals get into office so often with such support indoctrinating many aussies ! The VOICE result was a disgrace in a supposedly modern and enlightened “democracy” .
Totally agree with you! He won a lot of votes with the son of a single mother who brought him up in a State Housing property – where the rent was low and they couldn’t be told to leave every 12 months because the landlords were selling. He had stability and he didn’t have to change schools and lose friends umpteen times. He never ever faced the threat of living out of a car. So why isn’t he doing anything about providing homes for people who urgently need them and doing it now? Who in the government agreed to his vanity project- where just a few people can decide to blow millions of tax payer’s dollars on something many others said was doomed to failure right from the start and which affected a minority of the Australian population. It seems that absolutely nothing else has been attended or achieved simce he became PM. Oh, no – there are all of his overseas trips where he is offering more taxpayer dollars as if those dollars are from his own private pocket. Then there is his glib smirking and smug response when asked about the price of petrol- chauffeur driven, he didn’t have any idea of something so unimportant as that!
i don`t believe the Governments state or federal give a toss if you are struggling -they if you are on the age pension they consider you are not paying tax., and therefore towards THEIR excessive salaries.
BUT WE ARE we might be free of income tax but there`s still John Howards G S T.
which EVERYONE IS PAYING . EXCEPT OF COARSE THE FILTHY RICH MINING , BANK, FUEL and C E O`S OF OTHER WEALTHY ORGINISATIONS who as we all know are getting away without paying any tax -or at best very little.
BUT as i was saying when the fortnightly pension is all you have to cover everything
with ( AND PAYING HALF OF IT IN RENT) how many could do that.
And on top of that because of health issues you have to rely on the public health mess. –WHICH the politicians refuse to do anything to improve.
The facts are that the supermarkets are making billions , the farmers are killing the sheep because they can’t sell them. The government doesn’t stop the collusion between the big supermarkets to keep prices high. There is no competition. The consumer loses. Where is the watchdog?