The effects of Inflation on Consumer Choices in the Food Retail Market: A Comparative Study of A-Brands Versus Private Label Food Products from both a Firm and Consumer Perspective

The substantial rivalry amongst A-Brands and PL Brands in the food retail sector requires a marketing approach that enables the analysis of the various options available in the market, especially in a context of economic instability and constant fluctuation in inflation levels since 2021. This scenario has led consumers to developing a more apprehensive approach towards grocery shopping decisions and when choosing one brand over the other one. The objective of this master’s dissertation consists in developing an explanatory model of the factors that predict consumer choices between both brands types, proposing a link with several variables such as perception of inflation, price sensitivity, perceived value, perceived quality, brand loyalty and perceived risk. Sociodemographic conditions, such as age and income, are also included in this investigation with the aim of identifying any patterns and trends through sample characterization. The initial research focused on the companies’ perspective, analyzing the evolution of sales, both in value and volume, of the most significant brands across the various market categories explored. The second study focused on the consumer perspective, through a quantitative study with a non-probabilistic sample, obtained through an online questionnaire that gathered 207 valid responses, analyzed using IBM SPSS Statistics. The observed results show that perception of inflation, price sensitivity, perception of value and consumer loyalty to A-Brands are considered as the most relevant factors when explaining Consumer Brand Choice. Contrarily, age and income do not have significant influence on food brand choice. At an academic level, this dissertation deepens the understanding of Consumer Brand Choice in the food sector, focusing on market data specifically from Portugal and its economic situation, evaluating pre and post inflation periods and their implications on shifts in consumer behavior. On a practical level, it offers valuable insights for brands to adjust their marketing strategies, emphasizing the need to align tactics with consumers’ perceptions and preferences.