An Eastern European regional survey has been carried out on how people’s consumption habits are changing in one of the most commonly purchased categories, consumer packaged goods (CPG), in a rising inflationary environment.
In a tough economic climate, we are holding back on spending, a regional survey reveals
A regional survey, including Hungary, has been commissioned by Publicis Groupe to find out how people’s spending habits are changing in one of the most commonly purchased categories, consumer packaged goods (CPG), in the face of a rising inflationary environment. The results of the research show that Hungarians are the most sensitive, with a higher proportion of people stopping their spending than, for example, Czechs, who continue to spend despite inflation. Slovaks and Poles also tend to catch up with the “Hungarian trend”. In general, it is true for all countries that consumers are most likely to cut back on their spending on restaurants and entertainment, while they are most likely to hold on to medicines, vitamins and coffee.
The research was carried out in April 2022 by Kantar, on behalf of Publicis Groupe, among nearly 3,000 Hungarian, Czech, Polish and Slovak consumers aged between 18 and 55. The survey looked at consumer habits in 5 CPG categories – confectionery, non-alcoholic beverages, food, pet food and coffee – to find out how high inflation and rising interest rates have changed consumption patterns.
You may download the study from here: Download
In April 2022, inflation was highest in the Czech Republic, where the rate jumped to 11.9% year-on-year, compared to 10.2% in Poland, 9.6% in Slovakia and 8.6% in Hungary. Average bank interest rates also took off, rising by 1 percent in Hungary – from 4.4 to 5.4 percent – while the increase in the Czechs and Poles was only 0.8 percent.
An interesting finding was which nation was most sensitive to the economic downturn. The Czechs are the most stable, with 52% of respondents not changing their spending habits or expecting to change them. The most striking change in consumption habits has been a reduction in spending, with three different ways of reducing spending – stopping spending, buying less and switching to cheaper brands – observed in the survey. The sensitivity of Hungarian consumers to spending is illustrated by the fact that they were the most likely to choose the first option, with 19% freezing their spending (17% of Slovaks, 13% of Poles and only 11% of Czechs). “While more than half of Czechs had not changed their shopping habits by April this year, the same was true for just over a third of Hungarians. The situation is better for Poles and Slovaks than in Hungary, but only by one percent each.” said Helga Major, Media Director at Publicis Groupe Hungary. The other two methods – buying less and switching to cheaper brands – were most common among Poles (40%), followed by Hungarians (37%), Slovaks (36%) and finally Czechs (30%). The increase in spending was most noticeable among Poles (9%), compared to the rest (6-7%). A general trend was that men were more reluctant to change their spending habits than women. On the issue of change, households with higher incomes felt less affected than those with lower incomes. In Hungary, the higher income group includes those earning over 430,000 HUF, 44% of whom said they had not changed anything, while the lower income group includes those earning under 270,000 HUF, only 33% of whom said the same. Age group was not a determinant of changes in consumption patterns, with only the Czechs showing some differences, where the older generation seems to be more stable, while for the Slovaks this is true for the younger audience.
Among pet food shoppers, there is a trend to shift their spending to the online space, starting with the Czechs, who reported 35%, while 32% of Poles, Hungarians and 25% of Slovaks reported this. The same can be observed for coffee purchases, with a smaller share of 12% to 16%, with the Poles leading the way. Online coffee buying is already starting to spread to neighbouring countries, a trend that is not yet very widespread in Hungary, but is clearly spreading.
There are certain product categories that we are not giving up on despite high inflation – medicines, vitamins, savings, hygiene products, coffee, pet food, basic foodstuffs and petrol. Expenditure on cosmetics, sports equipment, household goods and electronics has been moderately affected by inflation, while the categories most affected by the fall in consumption are restaurants, bars, culture, toys, travel and alcoholic beverages. This is where respondents have reduced or stopped spending the most.