A Look at the UK Market

PRICES UP, CONFIDENCE DOWN

as published by GfK in September 2022 Progressive Preschool

The last six months have been rough on consumers and it shows as we entered the summer with consumer confidence at historic low . Joe Staton, Client Strategy Director at GfK says “consumer confidence remains severely depressed as the impact of soaring food and fuel prices and rising interest rates continues to darken the financial mood of the nation. Despite a two point uptick in our hopes for our personal financial situation for the next 12 months, which might reflect optimism over imminent change at the top of the UK Government, the overall index languishes at a historic low amid acute concerns for the general economic situation.”

Low consumer confidence is reflected in the volume of  purchases we have seen so  far this year for total Baby Care. Compared to the same period last year, volume grew 0.18% as consumers are making more considered purchases. And we all still a way behind where volume sat in the same period in 2019 (-16%). However, growing at prices means that value trends show a more positive story, with value up 17.5% on Jan-Jun 2021, but again struggling to catch up to where the market was pre-pandemic (-8.8% vs. Jan-Jun 2019). More premium categories like strollers continued to help grow this value (+41% vs. Jan-Jun 2021).

HOW MUCH?

Inflation and the cost of materials is pushing prices up in many markets. In Total Baby Care we have seen prices grow by +8.6% from Jan-Jun 2021 – Jan-Jun 2022. This is partly driven by inflation, partly by consumers moving towards more premium brands and products and also because prices during the last two years have been the lowest we had seen in Total Baby Care since 2016, so we are seeing prices return to what they were pre-pandemic. When we compare price against the same period in 2019, we see that average price is up 17%. Nearly all categories within Total Baby Care have seen over a 10% price change since 2019 – this affects everything from more premium categories to smaller categories like soothers and teethers.

One category that has seen the biggest price shift over the last few years is highchairs. The growth from 2019 to 2022 was +51% and the increase in 2021 was +12%. The price for highchairs has been continually rising over the last four years. Combination Highchairs ( a highchair that turns into a chair and table as the child gets older) has been the segment to push this price growth, seeing a 100% rise against Jan-Jun 2021 and a 61% rise against Jan-Jun 2019. When looking at the different types of material that highchairs can be made of however, the price rise appears to be consistent across materials across over the last few years.

When looking at the price rises of online and in-store prices, we see that in-store prices are being hardest hit by inflation. In-store prices are up 35% compared to 2021 and 5% to 2019. However, if we compare this to what is happening online, prices are up 15% to 2021 and -14% to 2019. Again, we see highchairs here having some of the biggest in-store price increases (up 46% vs. 2021 and 68% vs. 2019). What is surprising is the growth of online price, as with a greater range of premium products online and with consumers more willing to spend premium online, it is surprising to see price growth behind in-store.

Moving into the last half of the year, prices are set to continue rising across  Baby Care as well as other sectors. With further increases to the cost of living coming, it is unlikely to see the volume of sales rise in the next six months . Purchases are going to be more considered and even everyday basic products will see volume drops. If volume is able to stay flat compared to last year, then we may continue to see some positive value growth in the last half of the year.

 We are grateful to GfK for this research.

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