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What Is the ‘Indulgence Index’?

Discover more about this re-emerging consumer spend trend…

The current economic climate is enough to make us all feel a little down. Days are rapidly shortening, the list of price increases rapidly lengthening, daily doom alerts demand we lower our thermostats, turn off our lights, don’t boil our kettles… (really?! We Brits cannot do without a cuppa!). Actually, there are a number of things it seems we are not prepared to give up, things that give us a little mood boost – affordable luxuries, with coffee (not tea!) and chocolate high on the list.

Mintel analyst J Forsyth has made the case for an ‘indulgence index’, noting that consumers are “treating themselves to posh chocolate and coffee to enjoy at home, looking for a mid-week boost. Food and drink are still relatively affordable and give a visceral sense of pleasure and escapism.”

It is a consumer behaviour pattern that has been witnessed in previous times of economic hardship and so it comes with little surprise that we are seeing its re-emergence as we find ourselves in the midst of our own deepening cost-of-living crisis. It’s also known as the ‘lipstick effect’ or ‘lipstick index’, identified and named by Leonard Lauder (of Estée Lauder), who noted that sales of lipstick remained strong even when times were tough – whilst the extravagance of a new dress and shoes could not be extended to, the purchase of a branded lipstick, an affordable luxury, was enough to give the mood boost required. This index is now established as an economic indicator, with J Forsyth stating “we’re already seeing it… I think this trend will only increase through what will probably be a very dark winter”.

The shift to discount supermarkets

Consumer spending habits are now all about finding clever ways to save so we can still enjoy the little luxuries that brighten up our days. We have already seen the pendulum of consumer spending swing towards the discounters, and not just for the essentials either. All sorts of bargains can be found in the ‘middle of Lidl’ or the Aldi centre aisle. Who hasn’t purchased a Hotel Collection: No.3 Pomegranate candle or home fragrance reed diffuser for a little Jo Malone Pomegranate Noir-style luxury?

Poundland's Twin Peaks

Poundland’s Twin Peaks – as good as Toblerone?

Chocolate and coffee are two things I’d struggle to go without. The coveted mid-morning cup(s) of coffee and the mid-afternoon slump eased with a square (or two) of chocolate – these little rituals and routines that make the day a bit more pleasurable. Making coffee at home saves the coffee shop spend. Save a little more with Aldi’s Nespresso-compatible single-origin coffee pods, just £1.99 for 10. For a chocolate treat, how about Poundland’s Twin Peaks – as good as Toblerone? Love a Ferrero Rocher? Treat yourself to Aldi’s Moser Roth Nocciola – £2.59 per box. Small spends, big wins.

 

Are we eating out less often? Downsizing to cheaper restaurants or forgoing these pleasures completely, replacing the experience with a premium ready meal, a posh pizza or a piece of steak to cook at home? You can pick up premium rump steak for just £2.59 at Home Bargains. Spending is reduced, but the affordable indulgence and the luxury experience are catered for.

It doesn’t have to be luxury – the bargains can be found across the tiers. Instead of a trip through the Golden Arches, head to the Aldi freezer aisles instead to pick yourself up the McDonalds-inspired Chicken Selects – just £2.49 for four with a choice of sweet chilli or BBQ dip. Fancy a

Woodgate Dark Fruit Cider

Lidl’s Woodgate Dark Fruit Cider

Greggs? Grab a ‘fakeaway’ copy – cheese & onion bakes or sausage & bean melts available.

Tim Martin, the founder of the JD Wetherspoon chain, has complained that his pubs are struggling because people are staying in and drinking cheap supermarket beer. Aldi does a very credible Birra Mappelli (copy of Birra Moretti) working out at £2.58 per litre, or pop to Lidl for a Woodgate Dark Fruits, (Strongbow copy) at £1.64 per litre.

Is a good glass of rosé your thing? Whispering Angel would normally set you back around £20, but at just £6.99, Lidl’s Vallee du Sud, Languedoc Rose makes a very good comparison, or try the specially selected Cote de Provence Rose for £7.49. Hard to find fault in either, salute!

 

Which affordable luxuries will consumers not forgo?

M&S Cream of Tomato Soup

M&S own label Cream of Tomato Soup

We asked our Good Sense Research Community to tell us what affordable luxuries they were not prepared to forgo. Chocolate topped the poll, with coffee, wine and fizz, steak and fish (seabass, prawns, smoked salmon) all getting a mention. The relatively new category of tinned cocktails was also referred to, as were flavoured ciders. Consumers also enjoy a stroll around in-store bakery sections, picking up ‘good bread’ – sourdough and baguettes, along with pastries and biscuits.

A trip to M&S was also alluded to as a luxury, but these days if you’re shopping the Remarksable Value range there are some great cost-cutting deals to be had with customers taking to social media to share discoveries – one commenting had he ‘walked into an Aldi or Lidl by mistake?’. Along with the basic essentials including eggs, pasta, baked beans, beef mince and pork sausages in the Remarksable Value range, M&S have included three of their own brand canned soups, including a Cream of Tomato, at just 55p for 400g compared to the Heinz’s £1.40+. M&S have recently announced that products from the value range of 140 ‘essential items’, are now making up nearly a quarter of the average customer food basket. As they witness the increase of consumers trading into these categories, so does their intent to focus further on these value offerings.

The rise of ‘dupes’

The switch from branded goods to own labels is another way consumers are budgeting, leaving enough left for treats and little luxuries. ‘Dupes’ – products that essentially mimic the standard and behaviour of the comparable branded item, at a lower price point, are a way to both spend and save at the same time! Those in the know are cleverly hunting down these bargain copycat products, and if you know where to look there are plenty worth a try.

If imitation is a form of flattery, Aldi has it down to a fine art. They are well known for their ability to create their own label products that are, as they say, ‘easily identifiable for customers without seeking to copy’.

Aldi's Free Cuthbert social media campaign

Aldi’s ‘Free Cuthbert’ social media campaign

Several of the brands Aldi has mimicked have taken issue, including Heck and BrewDog, not to mention the infamous spat between M&S’s Colin Caterpillar versus Aldi’s Cuthbert. The case ended up in court last year, and poor old Cuthbert crawled back into his chrysalis for a while but re-emerged triumphant this summer, although strangely not as a butterfly! The Aldi social media team had great fun during Cuthbert’s incarceration, posting #freecuthbert tweets including images of redesigned packaging with a forlorn-looking caterpillar peering out from behind bars. His triumphant release was celebrated with Aldi parking trucks emblazoned with #Cuthback slogans outside M&S locations. Although more recently it appears that the adversaries may be making friends, as Aldi once again took to social media on September 21st, International Day of Peace. Their tweet: ‘We are using this International Day of Peace to extend our antennae out to @marksandspencer.’ We can testify both Caterpillars are yummy and Cuthbert costs £3.01 less… other Caterpillar cakes are also available! Waitrose has Cecil, Tesco has Curly & Asda has Clyde! Head to Home Bargains though & you’ll find Claude at the rock-bottom price of just £3.99…

Lurpak vs Nordpak

Aldi’s Nordpak – one of our research panel’s favourite ‘dupes’

Often at less than half the price and indeed sometimes a little difficult to tell apart, dupes are widely spread and commonplace. Lurpak vs Nordpak – easy for the consumer to spot and ‘recognise’, subconsciously reassured that the products are in some way similar, we are happy to fill our baskets.

INews reports that while price helps, taste and texture count too, citing a consumer favouring Aldi’s version of Oaties over the original, Hobnobs, as being slightly less sweet and with a crunchier texture.

A quick poll around the office threw up a few of our favourite Aldi dupes Titan instead of Mars, Mini Cheese Bakes instead of Mini Cheddars, Spicy Nibbley Nobblies instead of Nik Naks, Delish instead of Graze, Mint Bubbly instead of Aero, Choceur Fruit & Nut bar over Cadburys…

More Aldi swaps…

A Penguin for a Seal
Snickers for Racers (available as ice cream too)
Müller Corner for Splitpots
Kelloggs Krave for Harvest Morn Craze
Special K for Benefit
Pringles for Stackers
Pom Bears for Teddy Faces
Quavers for Cheese Curls
Wotsits for Cheese Puffs
Pot Noodle for Snack Noodle
Nutella for Nutoka
Lotus Biscoff Spread for Belmont Biscuit Spread
Strawberry Cornetto for Gianni
Baileys for Ballycastle Irish Cream…

Some Lidl swaps…

Oreos for Neos
Tunnocks for Tower Gate Caramel Wafers
Shreddies for Malt Wheaties
Weetabix for Bixies
Magnum for Gelatelli

Our GSR community also shared some of their favourite dupes with us, with Nordpak, Titans and Ballycastle all getting a mention, along with Lidl Frosted Flakes, Aldi Diet Lemonade and not so much a dupe, just an excellent bag of crisps – Specially Selected Sea Salt & Chardonnay Vinegar, Great Taste Award winners – 150g for 99p!

Looking to leapfrog brands or want to develop your own? We are here to help! Our experienced and passionate team can guide you safely through from concept development to consumer feedback to production runs and launches. We would love to hear from you – contact us now!

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