InsightPress Release

Insight: Necessity drives consumer spending in New Zealand as living costs rise, according to JCDecaux

WELLINGTON, NEW ZEALAND — Outdoor advertising company JCDecaux New Zealand has released the results of its latest IRIS audience research, which reveals consumers are scrutinizing FMCG spend as the cost of living rises and household budgets are put under pressure.

Victoria Parsons, senior strategy and insights manager JCDecaux New Zealand, said, “Our Shopping List Status’ research found that New Zealanders are tightening the purse strings, with 91% noticing household budgets being stretched and a quarter of respondents reporting that they are actively cutting back. For New Zealanders noting reduced disposable incomes, grocery shopping is an easy place to make cuts. Shoppers are increasingly paying close attention to what goes onto lists and intro trolleys. It is interesting to understand consumer perceptions as to what is a necessity and what is a luxury; we see consumers justifying brand purchases as necessary for quite personal reasons.

“Out-of-Home can be a powerful platform to impact and influence in-store and online shoppers throughout the day while they are mentally planning their shopping lists; 83% of survey participants agree that brands that advertise on Large Format are quality brands, which is key for consumers to overcome price sensitivity and avoid replacement by home brands.”


Brands deemed an everyday luxury such as are most at risk to spending cuts with the research showing:

  • 58% of respondents are planning to stop buying everyday luxury items
  • 47% of respondents plan to adopt more home brands
  • 40% of respondents will only buy trusted brands
  • 77% of respondents claim price is the main consideration when choosing between similar products.

“What consumers deem an everyday luxury is interesting. Respondents told us items such as coffee and tea, bread, self-care, and dairy are non-negotiable in terms of buying favourite or quality brands, whereas for canned and frozen goods, and cleaning products, people are shopping the category based on price. Luxury does not mean premium, it means moments where you expect quality FMCG experiences and won’t trade down – you justify the price premium,” Gary Rosewarne, sales director JCDecaux New said.

“The research concludes that as inflationary pressures increase – due to growing interest rates and higher prices on most things we consume – brands should be focusing on protecting purchase intent and quality perceptions. Brands can get ahead of changes to consumer spending by communicating product benefits through Out-of-Home advertising, giving consumers the confidence to continue buying quality brands.”

The research also reveals that the emotion or promise of brands can overcome price sensitivity. Consumers seek validation to define which brands remain necessities on shopping lists. Brands without meaningful quality cues or unique brand benefits may be swapped out for cheaper alternatives.

According to the research results, the traditional notion of the household shopper no longer applies. Nearly all New Zealanders are household shoppers, whether all the time or occasionally. Women still form the majority of main shoppers, while men have increasing influence, with 43% identifying as the main shopper.

Key insights for New Zealand marketers include:

  • Kiwis are planning budget changes: everyday luxury brands without strong emotional reasons to buy are most at risk. Marketers should communicate their product’s benefits, particularly taste and quality, to give consumers confidence to continue buying quality brands.
  • People tend to list products, not brands on shopping lists: Certain brands have mental availability in a category – it doesn’t mean someone is shopping the entire category, it means considering the 2 – 3 brands people typically buy and potentially comparing these with specials.
  • People are thinking about upcoming meals while they are driving. Large Format Out-of-Home impacts audiences on obligatory journeys, when they are making mental shopping lists of the things they need.
  • Everyone is a household shopper: to grow penetration, FMCG marketers should be aiming to drive mass reach among all shoppers.
  • Online grocery shopping is growing: it’s also more considered and less impulsive than in-store shopping. FMCG marketers must consider how they reach and influence online shoppers, who typically tend to be younger. Out-of-Home is an effective channel to reach younger audiences, who spend more time out-and-about.
  • Advertising during difficult times drives higher sales: advertisers need to keep advertising, even when times are tough.

The research was conducted in May 2022 from 600 consumers nationwide, sourced from a nationally representative Pureprofile panel.

Access a copy of the research here.

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