As the cost of living continues to soar, most consumers are faced with a hard decision as they go for their monthly or weekly shopping: should I get the cheaper brand or my favourite brand?

For instance, currently, the Nivea deodorant spray is retailing at KSh655, while the Rexona roll-on is retailing at KSh199.

In such a case, some consumers are still choosing to purchase the Nivea spray, but there are also those consumers, faced with the current economic pressures, who opt to use the cheaper brand, Rexona, that serves the same purpose.

Kenya’s inflation rate stood at 6.8 per cent in November, according to the Kenya National Bureau of Statistics (KNBS).

The high cost of living has been attributed to the elevated cost of transport, housing and utilities, and food.

Shifting brand loyalty

Amid these tough economic times, the concept of brand loyalty is undergoing a significant shift.

Brand loyalty is when customers choose to repeatedly purchase from the same brand despite competitors’ efforts to entice them with similar products or services.

Once a cornerstone for many brands in your regular store, brand loyalty is eroding as consumers prioritise immediate cost savings over long-term brand relationships.

As prices rise and budgets tighten, consumers are more likely to seek out more cost-effective options, which often means abandoning their favourite brands in pursuit of better value.

In pursuit of cheaper alternatives, most consumers are also becoming more open to trying private-label or store-branded products, discounted brands, and generic or unbranded options.

The alternatives provide shoppers with a practical way to cope with rising prices, allowing them to manage their expenses while maintaining a satisfactory level of product quality.

Inflation has yet to start affecting brand loyalty this year. In 2022, a superbrands consumer insights survey showed that buyers across different purchasing classes in Kenya were opting for affordable brands because of budget constraints brought forth by the high cost of living.

The survey by Kantar TNS noted that the shift to low-value brands was no longer solely for the mass market but also more visible to even the middle-class consumer.

“With the middle-class consumer now experiencing brands across different price points in search of low-cost, higher value alternatives are better informed and more selective. This now places them in a better position to truly decide which brands they believe are superbrands across the different categories. The Kenyan consumer of today wants innovation and functionality,” Mr David Ogara, Manager, Kantar TNS, said in the report.

Another survey conducted by Ipsos in June 2023 also revealed that Kenya’s upper-middle and high-income households are increasingly dropping premium brands across various products from their shopping baskets as a way of coping with the rising cost of living.

The survey showed that 43 per cent of households with a consolidated gross monthly income of KSh300,000 and above are holding off from buying certain items.

This shows that de-premiumisation of consumption is a growing trend among Kenyan consumers who are facing significant budget constraints given the rising cost of living.

Nearly two years of high inflation have caused many consumers to say goodbye to premium goods in favour of cheaper alternatives.

The Kantar Brand Footprint 2023 survey notes that as prices continue to rise, people are feeling the pinch and are adapting by changing the way they shop in response.

The survey notes that when faced with financial pressure, consumers adapt their shopping habits in different ways but the main one is reducing their spending (save money).

With inflation, consumers purchasing power is eroded, and the quantity of goods that they can purchase at a particular time automatically reduces; for instance, about four years ago, KSh1000 could buy 8 litres of fuel, but now it’s barely 5 litres.

Secondly, if the consumers are not confident about the immediate future, the Brand Footprint survey notes that they think about saving money and spending less, but that does not mean they fill their banks and Sacco accounts; it just means that they stretch their shilling to last longer.

Further, consumers also reduce their frequency of purchases, and this leads to reduced foot traffic to stores. Consumers not only reduce their store visits but also start looking for more affordable stores or those that stretch the shilling.

“When the consumers get to the store, they now look for which brand or product is on promotion, or what is more affordable or within their pocket reach. Affordable is not necessarily cheaper but delivering value and meeting their current needs holistically,” said Catherine Macharia, Consumer Insights Manager, Kantar.

When consumers are in a store, this is the point they opt to drop a category or brand if their needs are not met holistically.

For instance, a consumer can drop bathing soap and get laundry multipurpose soap; this is not just because of price but also because of the different needs that the multipurpose brands meet.