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Trend Price Sensitivity – the higher price sensitivity of consumers and how to counter it

Trend Price Sensitivity – the higher price sensitivity of consumers and how to counter it

German consumers have become more price-sensitive as a result of the crises. That’s according to various studies and surveys from 2022. But how exactly does this greater price sensitivity affect shopping behavior? And how can companies and brands respond to it? We will look at these questions in more detail below.

How increased price sensitivity affects shopping behavior

In a 2022 survey commissioned by the Federation of German Food and Drink Industries (BVE) and the German Food Association (Lebensmittelverband Deutschland), conducted by the opinion research institute CIVEY, 90 percent of participants said they feared food prices would continue to rise. They were to be proved right – and there is currently no end in sight to the price increases, not to mention price cuts.


The focus is clearly on saving

Asked about the factors for product selection, for a long time taste was the decisive factor for most consumers. Things have changed in the meantime. In the above-mentioned survey, only 44 percent said they paid attention to taste – while a whopping 67.4 percent opted for price.

This change has occurred primarily as a result of Russia’s war in Ukraine and the associated negative consequences for the entire world. The latter are clearly noticeable to the majority of the population, so many people have adjusted their needs accordingly.

In concrete terms, this means that most consumers are reacting to rising prices by taking cost-cutting measures – in other words, when in doubt, they are more likely to choose the cheaper product and, as a matter of principle, make sure they buy as cheaply as possible. 56.8 percent said this in the survey.

However, it is interesting to note that sustainability remains a very important issue for consumers despite the increased focus on price. And almost one in three respondents also pays attention to organic quality when shopping.

McKinsey & Company and EuroCommerce came to similar conclusions in their study “Navigating the Market Headwinds – The State of Grocery Retail 2022”. According to the study, 44 percent of Germans want to save more on groceries than before, and among low-income households the figure is as high as 55 percent.

By comparison, in 2021 only 33 percent of respondents said they wanted to save. The price sensitivity of consumers in Germany has therefore increased by leaps and bounds.

Daniel Läubli, Senior Partner at McKinsey, assumes that consumers will more often choose the cheaper products and, moreover, actively look for special offers if inflation remains high or continues to rise. At the same time, however, consumers are demanding higher quality from these lower-priced products, according to the Swiss entrepreneur.

The study found that eleven percent of Germans now intend to buy more products from the premium segment than before. The premium trend is being fueled in particular by high-income consumers. In this group, 24 percent said they would increasingly reach for premium products in the future.

Low-income consumers, on the other hand, plan to spend less or no money at all on higher-quality and therefore more expensive products. This result indicates that price sensitivity has increased, particularly among lower-income consumers, which is of course anything but surprising.


How companies and brands can counter the increased price sensitivity

One central point can be derived from the findings of the surveys described above: While consumers have become more price-sensitive overall, a parallel trend is emerging of increasing polarization of consumer preferences: While people with lower incomes are basically forced to pay attention mainly to price, those with higher incomes are tending more and more to place quality above all else.

Companies and brands on the one hand, and food retailers on the other, can counter this conspicuous trend by, for example, cutting back on the middle of their product portfolio or range and instead selectively expanding and strengthening their basic and premium products.

It is now more important than ever to know one’s own target groups very well and to satisfy their needs in the best possible way. Not only the packaging design, but also the entire branding should be precisely tailored to the wishes of the relevant consumers. Due to the increased price sensitivity, this aspect must be given particularly strong consideration.

Focus on the essentials simply and clearly

In difficult, often chaotic times of crisis, people long for simplicity and structure. To communicate this as a brand, the design should be emphatically simple, clear and concise. Consumers also want to be able to grasp quickly and effortlessly what the respective product actually offers them. It is therefore advisable to focus on the essentials, for example, to consciously convey quality – as justification for the price.


Taking consumers specifically to a better world

Another, rather opposite, way of responding to increased price sensitivity is to specifically transport consumers to a better world. This is achieved, for example, by embedding products in a special, valuable context to simulate having money, so to speak – in the sense that the consumer gets the feeling that he or she can afford a certain luxury.

Such an approach to design also has the potential to distract from the ubiquitous price issue and encourage the consumer to focus on and engage with the pleasure they crave.

Why creativity is even more important in times of increased price sensitivity

In times like these, when consumers are much more price-sensitive, companies and brands have to be even more creative than usual. Since price is currently the main factor for most consumers when shopping, brands from the higher-priced segment in particular face the challenge of attracting attention with their design and triggering positive feelings – ideally so strongly that the consumer thinks, “I’ve got to have that,” despite the higher figure on the price tag.

If this does not succeed, it can currently be assumed that consumers are more likely to opt for the low-priced private labels of the respective grocery chains when in doubt. So to stand out on the shelf in an inviting way takes a lot of creativity. The goal must be to communicate the added value that consumers get when they give preference to the higher-priced product in a particularly appealing and convincing way.


Consumers’ heightened price sensitivity is a particular challenge for companies and brands in the medium- and higher-priced segments. Possible ways to meet it are clearly structured designs and embedding the products in an attractive, possibly even luxurious context. The implementation requires great creativity on a small scale. With our holistic approach, we help you to maintain your position in the market.

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