Consumers become more selective as cost pressures increase
Inflation is back, and the narrative follows a familiar script: cost-of-living pressure, trading down, price as the only lever left. But the data tells a different story.
Let’s start with the story we keep hearing, or if we’re honest, the one we keep telling ourselves.
Consumers are under pressure. Input costs are up, margins are tighter and shoppers are trading down. In that environment, the only levers left are price and promotion.
It’s a coherent narrative. It’s also incomplete in ways that are costing growers and brands real money.
Because here’s what it gets wrong: it conflates pressure with behaviour. They are not the same thing. Consumers feeling pressure doesn’t mean they act the way we assume they will. We’ve seen this before. At the height of the plastic packaging debate, consumers were vocal, angry, and apparently resolute. Open their fridge door and what did you find? Fruit and vegetables wrapped in plastic. The stated concern and the actual behaviour were two completely different things.
The same trap applies here. When we assume that financial pressure automatically translates into price-driven behaviour, we stop asking the harder question, and we end up chasing volume movement and calling it demand creation. They are not the same thing. And mistaking one for the other is where strategy starts to unravel. So what does that data really show?
Consumers haven’t abandoned fresh
Core fruit – bananas, apples, the category staples – continue to anchor the weekly shop. Lunchboxes still need filling. Kids still need fruit. And the health rationale hasn’t evaporated under cost-of-living pressure; if anything, it’s stronger than ever. Thank the Millennial parents for that – a generation that reads labels, thinks about what goes in their kids’ bodies, and has made fresh fruit a non-negotiable even when budgets are tight.
If price were genuinely the problem, we’d expect to see a structural category collapse – sustained, broad-based decline as shoppers exit fresh produce entirely. We don’t see that. What we see is selectivity, which is a very different problem.
Shoppers are being selective, not cheap
Under pressure, consumers don’t buy less of everything. They buy fewer things more deliberately. They protect the choices that feel familiar and trusted and they become less forgiving of anything that requires effort, explanation, or risk.
This is why you can have two SKUs sitting at similar price points and watch their performance diverge dramatically. It’s not the price. It’s the clarity, the familiarity, the confidence that one product delivers and the other doesn’t quite earn. Stress doesn’t make consumers irrational – it makes them more intentional.
Being price-right is table stakes, not a strategy
Across most fresh produce categories, the majority of SKUs sit at or near the category average price point – yet only a handful ever deliver real scale. Take the apple category. Pink Lady, Royal Gala, and Granny Smith dominate volume while most of the category clusters around the same price line. Price alone doesn’t explain the gap.
Then look at the branded varieties – Bravo, Jazz, Envy, Kanzi. They are priced above the category average, some meaningfully so. And they’re still alive. Not dominant, but present, with a loyal base willing to pay a premium week after week. If price were the deciding factor, they simply shouldn’t exist. What keeps them viable isn’t a price advantage, it’s a flavour promise, a clear point of difference, and a consumer who actively seeks them out.
That’s the real lesson. Premiumisation is possible, but only when a product has genuine clarity about what it delivers and who it’s for. Price enables participation. It does not create demand. Facings, placement, and repetition do more heavy lifting than any marginal price move. And a clear, trusted identity does more work still.
Similar price does not produce similar outcomes. Being cheap enough to be considered doesn’t make you chosen. What makes you chosen is something else entirely: being clear, being familiar, being the low-risk option in a moment when consumers are actively avoiding risk.
Price is a filter. It gets you through the door. It doesn’t close the sale.
Promotion: volume vs demand
Deep promotional activity creates spikes – that much is true. But where does the volume come from? Mostly from other weeks (shoppers stock up and buy less the following fortnight), other SKUs in the same category (cannibalisation), or other retailers (switching that reverses when the deal ends). The category rarely grows just based on promotion alone.
If promotional activity genuinely built demand – if it brought new buyers in and kept them – categories would look very different to how they do. Instead, what heavy promotional reliance often produces is a consumer base trained to wait for the deal, and an underlying demand profile that’s weaker than the movement data suggests.
Volume is not demand. Movement is not growth. The distinction matters enormously when you’re making decisions about what to grow and at what scale.
This is part of Samrat Acharya’s ongoing series on consumer insight and commercial strategy for the Australian fresh produce sector. The next article will be available in Produce Plus Winter.
