Brand loyalty ain’t what it used to be

IN THE end, greed will get you. Last year, top-flight consumer goods companies were boasting about their ability to push rising costs through to customers and grow their profit margins amid rapid inflation.

Their world-famous brand-name products, they said, were so popular that shoppers would skimp elsewhere to keep on buying. “Irresistible superiority,” said Procter & Gamble (P&G), maker of Pampers diapers and Ariel detergent. Snack-food group Mondelez argued that “the enduring strength of our iconic beloved brands gives us substantial pricing power”.

These days, they aren’t so cocky. Weary consumers, particularly at the lower end of the financial spectrum, are looking for ways to cut back spending on everything from fast food to household appliances. More than three-quarters of Americans surveyed by McKinsey reported delaying purchases or trading down in some way.