A new survey of global consumer sentiment shows people everywhere adjusting to higher living costs by taking action regarding their spending behaviour.
The 12th EY Future Consumer Index is based on the views of 21,000 people across 27 countries and finds consumers are taking action to reduce spending in their lives.
94% of respondents globally said they are concerned about rising living costs, 55% say brands are no longer important and 29% say they have switched to private label or own brand products.
The survey also finds consumers across all income bands are more frugal in their spending.
36% of consumers plan to spend less on clothes, 44% expect to buy less takeaway food and 49% of people plan to spend only on essential products.
Fashion trends have also dropped in people’s priority list as 62% of respondent do not feel the need to keep up with latest fashion trends and half would consider own brand or private label products for clothing food and accessories.
67% said they now prefer to repair rather than replace their possessions.
Overall 79% of consumers feel prices for food have increased in recent months and 74% have noticed some brands have reduced their pack sizes without reflecting changes in prices, otherwise knows as shrinkflation.
“It was very clear from our survey that consumers are continuing to reign in spending amidst a very challenging cost of living environment,” Colette Devey, EY Ireland Partner and Consumer Products and Retail Lead said on RTÉ’s Morning Ireland.
“Affordability is front of mind for 35% of respondents to the survey and that’s up from 25% from our previous survey in October 2022,” she added.
She said consumers’ move away from branded goods poses a challenge to major consumer goods groups, and they are now looking to respond to ensure their revenues do not suffer as a result.
“What we’re seeing is a change in the expectation of value amongst consumers, and that is coming through in what they’re looking to put in their grocery basket,” she said. “We’re seeing the brands looking for extended product ranges and really trying to suit the consumer at the lower end of the price spectrum.”
Sustainability has slipped in importance to consumers compared to its previous survey, as a result of cost concerns.
However Ms Devey said that consumers are continuing to make more environmentally-friendly choices – even though price is the main motivating factor.
“We’re still seeing consumers operating in a very sustainable manner, driven by cost and cost-imperitives,” she said. “Consumers are now looking to repair rather than replace products, looking to recycle and repurpose items, and looking to what they buy and make sure those products have good, long product lives.”
However, the survey also finds that those who can afford it are prioritising holidays, and intend to spend more in this area in the coming months.
“We’re seeing that divergence in terms of those people that have perhaps a little bit more disposible income available to them,” she said. “They’re still looking for experiences like vacations.
“That has always been a feature of the Irish consumer – wanting to make sure that there’s still a little bit of money set aside for a night out or a holiday.”
The EY Future Consumer Index also reveals almost half (46%) of consumer respondents rely on technology to manage their daily lives.
In light of this, it is not surprising then that data theft and security breaches are an issue of concern for a majority of respondents, most notably ID theft (55% very concerned), data/security breaches (53% concerned) or downloading a virus (52%).
Consumers are also wary about what it happens to their data, with 53% concerned that companies may sell their personal information to a third party.
Article Source: Consumers more frugal due to rising costs – global survey – Joe Mag Raollaigh