Budget austerity offers a sense of control
A distinct majority of CEE shoppers are focusing on rational, budget-conscious choices, with respective shopping preferences mostly increasing over the past year. It appears that shoppers in CEE are gradually adopting the more rational behavior of WSE countries, with some austere blips: 70% of Hungarian shoppers prefer buying what is necessary rather than what they like, compared to a CEE average of 58%. In Croatia, 69% pay attention to price rather than quality (CEE average 63%), and almost 75% of Czech shoppers intend to spend less on everyday goods (CEE average 67%).
Budget austerity in shopping preferences
Source: Behavior Change Fall ‘24
How do shoppers ensure they get the most out of their budget?
A closer look at touchpoints provides some indication: while WSE shoppers rely strongly on their shopping lists, the top five touchpoints in CEE reveal a wider variety. Loyalty programs, promotions, and retailer apps are more influential in these countries, suggesting that shoppers are more open to change and alternatives.
Top 5 touchpoints
CEE-8
Loyalty programs
Shopping list
Retailer apps
Promotion leaflets and flyers
Digital coupons
WSE-12
Shopping list
Loyalty programs
Promotion leaflets and flyers
Digital coupons
Retailer apps
Source: Behavior Change Fall ‘24
Always looking for the better deal
The affinity for promotions is generally high in CEE, with only 18% of shoppers stating they do not pay attention to special offers. However, the business impact varies considerably from country to country: the Czech Republic leads all of Europe with a promotion value share of 56%. In eight out of nine CEE countries, the promotion value share surpasses 30%, with only Romania generating a mere 23%.
Discounts and special offers are also a way for brands to interact on social media. This is the top expectation of shoppers across Europe, but even stronger in Central and Eastern Europe.
Promotions can also incentivize switching: the willingness to switch retailers is higher in CEE than anywhere else. Even though two-thirds of shoppers declare loyalty to their main retailer, they still shop around; only a few are sure not to shop at another supermarket (5%), hypermarket (8%), or discounter (15%).
Looking beyond the FMCG industry into younger near-FMCG channels, we find examples of how shoppers leave their rational behavior behind and enjoy small “islands of escapism” for little money. While Amazon’s penetration in CEE is fairly low, 40% of CEE consumers have shopped at Temu in the past 12 months, followed by an increasingly popular AliExpress, reaching an average of 20%. Where available, shoppers are also fond of Action: penetration reaches 43% in Poland, 32% in the Czech Republic, and 27% in Slovakia.
Questioning the value-add of brands
For many years, shoppers in CEE have been brand lovers. One reason is that, for decades, they did not have access to popular Western brands. Additionally, private labels have not been available for long, nor in the broad variety that shoppers in WSE countries are used to.
This is no longer the case: private label preference has steadily grown in CEE countries, reaching 55% in fall 2024. For the first time since we started tracking shopper behavior change in 2021, brand preference in CEE has dropped below WSE levels.
With budget squeezes easing, shoppers are no longer “forced” to buy private labels. Positive personal experiences and increased availability have turned private label products into a matter of choice. This trend is likely to solidify, as 70% of CEE shoppers are not willing to pay extra for brands, with slightly lower percentages in Poland (64%) and Romania (60%).
However, shoppers are, in certain cases, prepared to pay more if a brand resonates with them. For example, the mineral water brand Mattoni has built on more than 150 years of heritage in the Czech Republic by innovating with different flavors and functional additives. They have expanded their range to include Mattoni Imuno, which combines “great taste, natural minerals for supporting immunity, and a popular trendy can.” With a focus on sustainability, Mattoni, together with the online grocery shopping site Košík.cz, created the first circular, deposited bottle, 80% of which is made from recycled plastic. Last year, Mattoni increased its already high brand penetration to 53% (+7.4%), frequency by +12.5%, and spend by almost +25%.
If done right, brands still have the opportunity to win the hearts of CEE consumers.
Source: www.mattoni.cz/mattoni-imuno-plechovka
Private labels: availability and appreciation count
Whether shoppers opt for private labels depends greatly on the availability of choices, and CEE countries are still not on par with WSE. As a result, there are considerable differences in private label share, ranging from a rather low 15% in Bulgaria to 36% in Hungary, which is still slightly below a “top-private-label-country” like Belgium. However, numbers are growing steadily: the Czech Republic, for example, showed a private label share of 23% in 2019, now reaching 30%.
The penetration of private labels is closely related to the retail landscape, which varies from country to country. A relatively low discounter share, as seen in Bulgaria (17%), explains the lower share of private labels compared to countries like Hungary, with a 40% discounter share and hence a stronger footprint of private labels.
Private label share in CEE & WSE countries
Source: YouGov Shopper Panel, FMCG excl. Fresh
Another interesting aspect is that 50% of CEE shoppers do not differentiate between brands and private labels. Hana Rihova, CEE Commercial Director for Advanced Solutions at YouGov, explains this by the type of retailers and the respective private labels found in the market: “Lidl, for example, has a strong presence in CEE. The discounter often cooperates with local manufacturers for its private labels, positioning them as branded products with similar features to premium brands, resulting in a perceived high quality. No wonder it is hard for shoppers to distinguish between private labels and brands, and they see no reason to pay a premium for the latter.”
As mentioned earlier in this report, a majority of CEE shoppers are willing to try new things. Retailers should enter these markets before others do, catering to the desire of CEE shoppers for smart choices and discovery. Brands should ensure they do not miss any opportunity and act before the market is taken over by private labels!