High cost of living dampens brand loyalty - survey

L-R) Cynthia Mwende, Pwani Oil Products Brand Manager Wambui Waiharo, Food4Education CEO Wawira Njiru and Banice Wanjiku of Ruiru Primary school during the handover of assorted food items donated by Pwani Oil at the school. Over 5,000 school-going children in Kiambu and Nairobi County, unable to feed well due to covid-19 disruption will benefit from the company's donation.ON 20/11/2020. [FILE, Standard] A new market survey has shown Kenyan consumers are giving up value for products as the high cost of living bites. The report by market researcher Nielsen IQ points out that enterprises should innovate in e-commerce and listen to consumer needs to buttress brand loyalty. The survey says that alcoholic beverages, diapers, and breakfast cereals are the top consumer products with the highest brand loyalty in Kenya. Cooking oil, maize flour, laundry products, skin care airtime and data record low brand loyalty. The 2024 report dubbed Recover and win in the marketplace, has also shown that Kenyans are spending less on fresh meat, personal and beauty care products, non-alcoholic and alcoholic beverages as well as dry canned groceries. On the other hand, the report says, consumers are spending more on education, childcare, transport costs, savings and investment as well as financial services, while rent, utilities, health wellness and fresh produce remain the same in consumer spending. The analysis has shown that 47 per cent of Kenyan consumers say they are in a worse financial position, due to increased cost of living, economic slowdown and job loss. The study further explains that ensuring access to basic commodities is the most important thing to consumers today. Physical wellness and mental health are also a priority for consumers while financial security comes fourth in order of priority. According to Faith Wanderi, the Managing Director of Nielsen in Eastern and West Africa, the purchasing power for consumers has shrunk. "Their wallets have shrunk. Price is the basis for decision-making for any product that they want to buy," she said in an interview. "You need to understand consumers do not assume that one size fits all. You have to innovate and price commodities right," Wanderi said. She noted that the young generation has changed their purchasing power from traditional channels, "from our data, we can tell that by 2029, Gen Z will be leading in terms of purchasing power in the country." The report has shown that most consumers no longer have brand loyalty, with seven in every 10 consumers having switched brands in the past one year, as a result of increased prices. Paying more The report has shown that Kenya's market is highly inflationary with consumers paying more for less, with an 11 per cent food basket value growth. According to the report, consumer wallets were under pressure in 2024, with 47 per cent of Kenyan consumers saying they are in a worse financial position in 2024 than the previous year. "Some 83 per cent of consumers attributed the worsening financial situation to increased cost of living, 56 per cent, economic slowdown, and 35 per cent said it is due to job insecurity or job loss," The survey stresses. According to market research, the majority of Kenyans are feeling constrained by the recession. "At least 88 per cent of Kenyan consumers think they are currently living in a recession, 60 per cent expect to be in a recession for the next 12 months, and 68 per cent reckon they only have enough for food, shelter and basics," noted the report With many Kenyans battling a high cost of living, Kenyans are equally concerned about increased taxes, huge utility bills, rising food prices, job security and economic downturn. In 2024, the majority of Kenyans prioritised access to basic needs, mental health, physical wellness and job security. On the other hand, consumers cut back spending on commodities like fresh meat, personal and beauty care products, non-alcoholic beverages, dry and canned groceries and alcoholic beverages. When compared to 2023, consumers maintained spending on rent and mortgage, utilities, health and wellness and fresh produce, signalling a shift to healthier living. The report has shown that brand loyalty in the review period was uncertain, mainly driven by the cost of commodities; consumers are opting for cheaper alternatives. "Almost seven in every 10 shoppers have switched brands in the past one year due to increased prices," the report asserts. The report projects that out-of-home dining will see the highest net change in spending. Food delivery, home decor, clothing and apparel, holidays, electronics, membership clubs, telecommunications and investments, will see a decline in spending. According to the report, 98 per cent of consumers have changed how they have shopped for Fast Moving Consumer Goods in order to manage expenses. To adapt to the shifts, consumers are adopting a homely lifestyle with 29 per cent preferring working from home. 46 per cent, spend more time at home. Declining market To avoid wastage, 29 per cent of consumers are eating leftovers more often, and 56 per cent only buy what they will use to avoid waste. "Consumers are opting for planned budgeting with 42 per cent always comparing prices before purchase, and 46 per cent preparing a shopping list in advance," the report points out. To grow in the declining market, the market researcher has recommended that sellers go the affordability way. Businesses can adapt marketing and products for diverse consumer needs and differentiate with a varied and expanded price-tiered assortment. "Brands must reevaluate their positioning, and innovate how they appeal to consumers," the analysis challenged business leaders to innovate to stay relevant since growth will come from a balance of both online and in-store strategies.

High cost of living dampens brand loyalty - survey

Related Topics

Popular this week

Latest Stories

The Standard Insider

Digger Classified

GET OUR NEWSLETTER

CONNECT WITH US

FOR THE LATEST JOB ADVERTS

DIGGER JOBS

Digger Motors

Digger Real Estate

High cost of living dampens brand loyalty - survey

Related Topics

Trending Now

Popular this week

Latest Stories

The Standard Insider

Digger Classified

GET OUR NEWSLETTER

CONNECT WITH US

FOR THE LATEST JOB ADVERTS