UK consumer confidence soars to nine year high
UK consumer confidence has risen sharply since the start of the year, boosted by a variety of good-news stories about the British economy.
According to DairyCo in June 2014, consumer confidence was at its highest level since March 2005.
It says at the onset of the economic downturn, there was a sharp decline in confidence. Consumer budgets tightened, while food prices rose much faster than average wage increases.
As a result, consumers became increasingly savvy in their shopping techniques. Shoppers traded down to private label goods, a trend that has been particularly evident in the Cheddar market, for example.
DairyCo outline that the retail price index (RPI) for butter has risen faster than any other grocery item since 2007. However, consumers have not been deterred by rising prices and with steady volume growth, expenditure on butter overtook that of margarine & spreads earlier in the year. While branded yellow fats still make up the majority of the market, much of this growth has again been driven by sales of private label butter.
Consumers are not expected to abandon the shopping habits developed over recent years. The focus on price is likely to continue, something which will influence the balance between private label and branded dairy products going forward.