Signal More than three-quarters of consumers still trade down, differently by category

Summary

McKinsey finds that trading down remains widespread, with more than three-quarters of consumers still doing it in some form. The report attributes this to a long cost-of-living squeeze fed by inflation as well as geopolitical instability and swings in energy prices. The way people economise, however, depends on the category. For essentials, shoppers tend to stay in the category but optimise, switching brands, choosing different pack sizes or looking for promotions. For discretionary purchases, they increasingly reconsider how they buy and whether to buy at all. This category-by-category pattern means businesses cannot assume a single trade-down response across their portfolios.