The K-shaped economy is accelerating a ‘two-speed’ grocery market, as UK shoppers diverge across discount dependent spending and premium grocery demands, according to the latest research from shelf-edge communications platform, Pricer.

Its latest study shows that UK shopper behaviours are increasingly mirroring a K-shaped economy, characterised by spending growth among higher earners while middle- to lower-income households remain squeezed by steep prices and slower wage growth.

This, its poll suggests, is splitting grocery spending into two distinct groups – a price-pressured majority that is increasingly reliant on discounting formats and a smaller but high-value minority that’s driving growth in premium food retail.

Two distinct groups driving different demands

Original research of 1,000 shoppers shows cost-of-living pressures have made price vigilance mainstream, with 78% now more price conscious compared to a year ago, while three quarters (74%) actively seek discounts and promotions.

Almost half (47%) have switched from their usual supermarket to a discounter, with ‘discounter switching’ most prevalent among younger and lower-income customers.

More than half of Gen Z shoppers (56%) have switched to discounters, while 36% of all consumers say they now buy mostly discounted products. Trading down is widespread, with 56% changing from branded to own-label products, rising to 72% among lower income groups.

At the same time, premium grocery formats are seeing growing demand among higher earners, with 91% of shoppers earning £125k+ now choosing to shop more at premium or upmarket supermarkets.

These shoppers are significantly less discount driven, but more demanding when it comes to quality, availability, sustainability and digital integration in-store. Almost half (45%) of the higher earners Pricer polled say they now want sustainability and sourcing information displayed at the shelf-edge, rising to nearly nine in ten among some upper-income segments.

A grocery market moving in divergent directions

“There is no longer a single grocery market moving in one direction,” said Finn Wikander, Chief Product Officer at Pricer.

“Retailers are now serving two very different shopper mindsets at the same time, one focused on affordability, the other on quality, transparency and convenience.”

This, according to Wikander, underlines a growing strategic challenge for grocery retailers.

“Protecting affordability for the price-pressured majority is essential to maintaining volume and trust, while meeting the expectations of affluent shoppers is increasingly critical to margin, loyalty and growth,” he concluded.