About two in 5 US consumers would switch from brand name to generic grocery items as a result of a 10-20% price increase, according to an October 2011 survey by Accenture. Data from the “Pricing Shopping Survey” indicates that roughly one in 5 consumers would also make the switch given a price increase of less than 10%. Among US consumers, New Yorkers appear to be the least price-sensitive: 55% would switch to a store label version of a grocery item with a price change of up to 20%, compared to 64% of consumers from the rest of the US (excluding Los Angeles). The percentage price increase that would result in consumers stopping their use of the brand name product is on average at least 30%, with consumers in New York and Los Angeles being less price-sensitive than the rest of the US. Meanwhile, 73% of consumers from the rest of the US category say they are somewhat or very likely to change their grocery shopping habits if food prices rise this year, compared to just over two-thirds of consumers from New York and Los Angeles.
New Yorkers appear to be more concerned about fashion than their fellow citizens: 48% of those surveyed say they are worried about clothing prices going up this year, 14% more than consumers in the rest of the US (42%) and 33% more than consumers in Los Angeles (36%). Similarly, 47% of New Yorkers say they will likely change their clothes-shopping habits if prices go up, compared to 38% of consumers in Los Angeles. Among the various options considered, roughly two in 5 US consumers would respond to a price hike by not buying as much new clothing or only buying clothing that is on sale, while about one-quarter would shop for clothes more at discount stores or mass retailers.
According to the study, about three in 4 US consumers would need at least a 30% discount to be persuaded to purchase clothing. In fact, 30% of consumers in the rest of the US category (outside of New York and Los Angeles) would require a discount of 50% or more to be persuaded, five times the amount who would be persuaded by a 10% decrease. New Yorkers are most easily persuaded by a 20% price drop, with 24% saying they would purchase clothing at that discount level, compared to just 18% of consumers in the rest of the US.
More than half of deal site members expect items in various product and service categories to be at least 50% off to be considered a good deal, according to an October 2011 report from Retrevo. Data from the Gadgetology study indicates that 24% of respondents would only consider a 70% discount to be a good deal for the apparel and shoes category, while 20% have the same expectation for home goods products.
Consumers are increasingly switching brands when another “peer” brand is on sale, with 38% in 2011 saying they did this compared to 33% in 2008, according to October 2011 analysis from comScore. Consumers’ loss of spending power is also leading them more frequently to cheaper products: about 19% of consumers switched to Private Label in 2011, up from 14% in 2008. According to the analysis, manufacturers that switch to smaller product sizes aren’t immune to this trend, as 68% of consumers report at least occasionally switching to another brand when noticing a downsizing in the brand they usually bought.
About the Data: Accenture’s survey respondents were consumers aged 18 years old or older residing in New York, Los Angeles, or elsewhere in the United States. The New York and Los Angeles sample sizes were each 501, while the rest of the US sample size was 999. The data for Retrevo’s report came from a study of online individuals conducted exclusively for Retrevo in October of 2011 by an independent panel. The sample size was over 1,000 distributed across gender, age, income and location in the United States.
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