In a context where the price of FMCG products has increased by 20% compared with the previous year, there are two key strategies shoppers in Latin America are employing to keep the pantry full.
They are becoming increasingly omnichannel, visiting an average of 10% more channels than they did last year. This is coupled with taking care not to increase spending at each point of sale they visit. Let´s focus on the strategies they use at the moment of truth: that instant at which they make a decision about which brand and product to put in their basket.
The most practical approach is to look for promotions, right? Not always. Analysing shoppers’ behaviour when they purchase take-home FMCG, we discovered that the categories that increased their volume sales the most based on special offers are the ones in recovery, not the ones growing sustainably. Besides, promotions are not enough on their own to sustain growth in declining categories.
As another way to control spending, Latins have already stopped buying their preferred brands to avoid the need to sacrifice a category. Households have had to migrate to cheaper brands; in the food category 42% of Brazilians have done this, followed by 33% of Peruvians, 16% of Mexicans, and 15% of Colombians. Regarding home care products, this number rises to 56% of Colombians and 41% of Peruvians.
Mexicans and Brazilians are already in trouble
Consumers living in the two largest countries in the region do not have enough money to see them through to the end of the month. Households in Brazil and Mexico have been significantly affected by rising prices: 36.3% of people in Brazil and 41.8% in Mexico report that their financial situation has worsened in 2022.
In addition, the situation has been pressuring households to take out loans to bolster their budget. Being in debt is now a reality for many.
The pandemic has led to changes in shoppers’ mood and behaviour. Identifying this ongoing impact, past and future, is key.
To find out which other habits Latin Americans are adopting to deal with inflation, download our full report and get in touch with one of our experts.