Euromonitor's Global Consumer Trends 2023 report identifies the global consumer-driven trends that have been shaped by the current sociodemographic, technological and economic environment. While these trends are evident globally, the level of impact and business response can vary across regions. Our team of experts in Vilnius have identified two of Euromonitor's Global Consumer Trends – Budgeteers and Eco Economic – that are having the most significant impact on Eastern Europe.
Budgeteers: Uncertain times drive private label resurgence
As the cost of living rises and economic uncertainty looms, Eastern European consumers are looking for ways to save and make their money stretch further. Many are turning to cheaper brands, private label products, and discounter channels to cut down on unnecessary spending. However, budgeting in this way does not have to mean sacrificing the little luxuries that make life enjoyable. Consumers can still enjoy personal values-based retail, dining, and entertainment, maintaining a reasonable lifestyle that helps them cope with the current economic challenges.
Eastern Europe posted one of the highest rates of inflation globally, reaching 14% in 2022
Eastern Europe's high inflation rate severely boosted the prices of all basic commodities. Within food and drinks, the median price increase ranged from 11% to 17%, generally growing together with the inflation rate. This has had a negative impact on the purchasing power of consumers in the region; however, it has paved the way for private label to flourish.
Due to the resurgence of discounter channels and growing demand for private label products, Eastern European grocery retailers are scrambling to expand and reimagine their private label portfolio. One of the leading Croatian retailers by number of outlets, Studenac, introduced over 300 private label SKUs in 2020-2022 across all product categories and worked with local producers to offer lower cost and enable further innovation in private label, while eliminating marketing overheads. In the Czech Republic, online retailer Rohlik has expanded its portfolio with its own private label brands that position themselves as organic and associated with lower CO2 emissions.
Eco Economic: Sustainable behaviour and cost saving instead of mass consumption
Soaring prices, a rising cost of living and uncertainty about the future have naturally forced Eastern European consumers to reduce consumption and look for cost-effective options. Sustainable behaviour has evolved from just buying sustainable goods to acting more sustainably in daily activities. The main reason for the change is the motivation of the Eco Economic consumer, starting from cutting back unnecessary spending to using fewer resources, such as reducing appliance use and lowering heating, and green activities such as recycling, reselling and repairing. However, consumers will also not compromise on the quality of products, where possible. Therefore, affordable sustainability is the key in the retail environment where saving money is the top motivation for consumers.
Retailers and other businesses are innovating to support Eco Economic consumers in different ways, including offering lower price options, green initiatives and cost-effective models like reselling, repairing, recycling and others. Knygos.lt, an online bookstore in Lithuania, launched the option to resell used books through its store in October 2022. Sumena, an e-commerce store which was launched in Estonia in summer 2022, sells surplus products at lower prices. This trend arrived from Scandinavian markets, where food waste was a hot topic for many years. However, in Estonia, consumers are also motivated by lower prices on food and are becoming increasingly aware and focusing on the fight against food waste.
Another concept is more linked to efficiency – ecological innovations that facilitate business operations and reduce costs. Zabka Polska Sp zoo, the leading convenience store retailer in Poland, has opened its fully renewable energy-powered store, Zabka Eko, focusing on eco-friendly, energy-saving solutions, including remote lighting control systems and smart shop control solutions, innovations based on AI that cooperate with the store staff. At the same time, this concept encourages consumers to act more responsibly by using eco-friendly transport, eco-machines for bottles and buying responsible products.
66% of respondents in Poland try to have a positive impact on the environment through their everyday actions
Source: Euromonitor’s Voice of the Consumer: Lifestyles Survey, fielded in January-February 2022
Demand for cost-effective options and quality
The two trends showcased above illustrate the need for businesses to tailor their products and services to Eastern European consumers and, at the same time, to find balance between consumer necessities and business efficiency during the period of economic downturn and uncertainties. The war in Ukraine, potential energy price shock and rising cost of living will remain the major factors impacting consumer confidence. Consumers will continue to seek better value for money from the products and services they purchase. Therefore, cost-effective options focusing on quality, durability and energy efficiency, and avoiding unnecessary waste of food and energy, are the solutions companies should look to.
Visit our consumer trends page to keep up with the 2023 trends like Budgeteers and Eco Economic throughout the year.