The Strategy& report “More modest lifestyles and less spending – the lives of Polish consumers” is an attempt to answer the question of what had the greatest impact on the attitudes and buying behavior of Poles. In addition, it also shows the perspective of Polish society and changes in its behavior in the context of the study conducted in 2020, right after the outbreak of the COVID pandemic.
In recent years, many businesses in Poland have been on a steady path of rapid growth. Under the circumstances, relatively less attention was paid to costs and operational excellence, with all forces being directed towards development and growth. Suddenly, companies have come to face a drastic rise in virtually all costs: labor costs, energy, fuels, and raw materials. The COVID-19 pandemic and the war in Ukraine have contributed to this situation, but they were not the only factors behind strong inflationary pressures.
Simultaneously, the macroeconomic situation has forced consumers to rationalize their expenses and cut back on shopping. Also, it is already evident that consumers are trading down, or switching from the products they earlier preferred to less expensive substitutes. Strategy&’s most recent survey shows that we can hardly expect these trends to reverse in the coming months. This consumer sentiment is prompting businesses to take a critical look at their operations. Optimizing costs, making supply chains more flexible, looking for a “plan B” within the supplier structure, considering nearshoring options, using data to better understand consumers and reach them, and using well thought out pricing and promotional measures are all becoming absolute priorities.
Krzysztof Badowski
Managing Partner, Strategy& in Poland
Household budgets of Polish consumers
Change in household spending by product category
Question 2020: How has your spending in the following categories changed in connection with the COVID-19 pandemic?
Question 2022: How has your household spending changed in the following categories, if at all, in 2022 (inflation and interest rate increases)?
Sample 2020: Poland, 1,000; Sample 2022: Poland, 1,203
Question 2022: How has your household spending changed in the following categories, if at all, in 2022 (inflation and interest rate increases)?
Sample 2020: Poland, 1,000; Sample 2022: Poland, 1,203
The current economic situation has a very strong impact on the structure of household spending. Above all, there has been a rise in spending on food products (78%), health and personal care products and services (59%), and clothing and footwear (50%). These are all essential goods, so it is difficult to cut spending in these categories.
In contrast, declines in spending, resulting from reduced consumption, are seen primarily in lifestyle categories: restaurants (25%), sports products and services (20%), and entertainment and media (17%).
The sharpest rises in spending on food products are declared by those who live in cities with up to 500,000 inhabitants (85%) and seniors aged 65+ (84%).
Nearly half of Poles are anxious about their future, and this applies in particular to their sense of financial security. Women are significantly more concerned – their professional and financial situation was worse than that of men even earlier, as a result of the COVID-19 epidemic and the related burdens in the form of remote education and care for the ill.
The economic situation is already causing as many as 57% of the Poles to rate the state of their savings as worse compared with previous years. Women are in a significantly worse situation in this aspect too – as many as a third of them cannot afford to put money away in savings.
Mounting inflation is also affecting the structure of spending in Polish families. In 2022, 78% of respondents estimate that their spending on groceries – in other words essential products – has increased. On the other hand, declines result from reduced consumption in the area of lifestyle spending, or on restaurants, broadly-understood entertainment and media, and sports.
Izabela Wisłocka
Vice-Director & Digital Transformation Expert at PwC Poland
Buying behavior of the Poles
Key factors behind the choice of product brands
Question 2020: What matters to you most when you choose product brands?
Question 2022: What matters to you most when you choose product brands?
Sample 2020: Poland, 1,000; Sample 2022: Poland, 1,203
Question 2022: What matters to you most when you choose product brands?
Sample 2020: Poland, 1,000; Sample 2022: Poland, 1,203
The same factors are important to the Poles, regardless of the purchase channels: price, product quality, promotional deals and brand knowledge. However, in traditional channels, the promotional factor plays a much greater role. In digital channels, in turn, brand knowledge proves more important, which is related to confidence and security.
The key change compared with 2020 is that when the Poles choose specific products, the most important factor for them is no longer product quality: it is indicated by the
respondents in 62% of cases, down from 80% in the previous survey. In turn, the importance of promotional deals has increased – 38% of indications in 2022 versus 31% in 2020.
A sharp decline in the importance of the environmental performance of products and their production represents an alarming trend.
For years, Poles have had a very high degree of price sensitivity compared with other consumers in Europe. They now declare that the economic situation has prompted them to attach even more importance to the prices of products and services. Those who say that prices matter to them more than before account for 61% of respondents, compared with 43% who said so during the 2020 pandemic. We can therefore observe a more pronounced trend towards greater price sensitivity, which will translate into reduced or delayed purchases in many categories. In the context of mounting inflation, which hinders precise price comparisons, market rivalry is likely to be based on the perception of prices.
Also, when Poles choose specific products, they chiefly pay attention to price – it is crucial for 73% of the population. The importance of promotional deals as a factor affecting purchasing choices has grown (nearly 40% of consumers), while the importance of product quality has declined – from 80% in 2020 to 62% in 2022. In addition, Poles have stopped paying attention to the environmental performance of the products they choose.
The findings signal a number of challenges for both manufacturers and distributors, who should be particularly thorough in reviewing their promotional policies so as to create favorable perceptions and simultaneously sustain margins. Also, understanding the necessary changes in the product portfolio will be crucial in efforts to more effectively address changing consumer needs. In addition, for many formats, it will be crucial to build customer loyalty and activate customers who are increasingly likely to postpone their buying decisions.
Maciej Kroenke
Partner & Leader of Revenue Management CEE at Strategy& Poland
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