Crisis changes Greeks’ consumer behavior
Once-profligate Greeks have radically changed their consumer habits since the start of the crisis, becoming more frugal in their purchases, even when it comes to basic necessities, and it appears that what started as a response to straitened times may become entrenched in a more permanent pattern.
Indeed, as the crisis drags on, the number of Greeks who are more cautious with their purchases is on the rise, not just as a result of the toll the crisis has taken on their budgets but also to a great degree because they are starting to develop a more mature consumer conscience – albeit as a result of the violent adjustment to austerity.
The data in the latest study of consumer behavior by the Marketing Laboratory of the Athens University of Economics and Business (AUEB) are revealing. The study period began in November 2014 and ended on January 31, 2014, and was based on phone interviews with 1,437 consumers.
According to the findings, seven in 10 consumers now restrict their purchases to the bare necessities, slightly more than two years ago, when the figure was six in 10. This trend has had a significant impact on the sales of products that fall into the “spontaneous purchases” category, such as sweets, snacks and chewing gum. Also 74 percent said they purchase fewer items.
Furthermore, 68.6 percent of respondents said they look for cheaper products, compared with 65.8 percent in last year’s study and 47.3 percent in 2013. This trend is also evident in the improved sales of own-brand products, which, however, have been slowing down slightly as household names push their prices down to become more competitive.
The data that are most revealing of a changing consumer mentality pertain to comparing prices between products as well as retailers. In this year’s study, 86.6 percent of respondents said they now do so, compared with 75.9 percent last year and 73.5 percent in 2013.
It is also noted that the number of consumers who shop at just one supermarket, rather than visiting different stores to get the best deals, is dropping. Just over half of respondents (55.4 percent) said they continue to shop at one supermarket, compared with 69 percent in 2014.
This illustrates the increase in bargain wars between different supermarket chains and consumers’ increased tendency to look out for special offers at different retailers.
On the subject of supermarkets, the study found that poorer households with a monthly income of 1,000 euros or less spend more than a quarter of their income on supermarket purchases, explaining the overall change in consumer behavior noted over the past few years. The reason is simple: While prices have gone down, they have done so at a much smaller rate than incomes.
The AUEB study reveals that households with a monthly income of up to 1,000 euros spend an average of 237 euros a month at the supermarket; from 1,001-2,000 euros they spend 328 euros (16.4-32 percent); from 2,001-3,000 euros, 375 euros; from 3,001-4,000 euros, 379 euros; and households bringing in more than 4,000 euros spend about 10 percent on their monthly supermarket purchases, at 421 euros.
“What the data suggest is that the high prices at supermarkets are a much bigger social problem than high prices in other sectors of the economy as purchases there concern basic goods and the burden is heavier on the poorest households,” notes Giorgos Baltas, the coordinator of the study and director of the university’s postgraduate marketing and communication program.
The average monthly expenditure on supermarket purchases is higher this year at 307 euros compared to last year’s 262 euros. This increase, Baltas says, is due to psychological factors such the January 25 general elections and expectations of an economic recovery, cultivated by the previous as well as the current governments.
“Other than this fact, the other indices do not point to a reversal of the trend or an improvement in the economic fundamentals, which remain dire,” stresses Baltas.
It is worth noting that the average monthly spending of 307 euros on supermarket purchases is lower than in 2012, when it stood at 332 euros.
Average spending per supermarket visit has also risen to 54.5 euros compared with 46.8 euros in 2014, nearly back to 2013 levels of 53.1 euros. However, 67.2 percent of respondents said they rarely spend more than 50 euros per visit, with just 7.3 percent spending double that amount.
Another trend that has emerged is a rise in the frequency of supermarket visits, with consumers breaking up their purchases into smaller amounts depending on what they can afford on that particular day. Therefore, Greeks visit the supermarket 7.1 times a month, compared to 6.9 last year.
Also interesting is the fact that the overwhelming majority, 96.4 percent, decide what they’ll buy before they head to the shops in a bid to avoid making unnecessary purchases. In addition, 60 percent of Greek consumers have already decided which brands they will buy beforehand, compared with 49 percent in 2013. Researchers attribute this to the fact that consumers keep themselves informed of special offers on products or brands through advertising leaflets or the Internet.