Product affordability is now the leading concern for more than a third (35%) of consumers around the world, the latest edition of the EY Future Consumer Index has found.
This is up 10 percentage points since October 2022, the data showed.
Some 94% of consumers say that they are now 'worried' about a rise in cost of living costs, with consumers in both developed and emerging countries making 'dramatic, short-term lifestyle changes' to cope with ongoing disruption and inflation.
Of the five consumer segments, 'planet first', 'experience first', 'society first', 'health first' and 'affordability first', the biggest decrease was seen in 'planet first' (down nine percentage points, from 25% to 16%) reflecting the fact that shoppers are now prioritising affordability above other concerns.
At the same time, the 'health first' consumer group has seen an increase of seven percentage points (from 17% to 24%) since October of last year, which indicates that consumers are reprioritising their individual needs, focusing on their own health and finances.
The uncertain economic environment is having a major effect on consumer perceptions about the economy, with 92% of respondents 'concerned' about the economy in their own country, and 39% expecting the situation to 'get worse' over the next six months.
In addition, more than three quarters (79%) believe that food prices have increased in the past three to four months, while 74% say they have noticed 'shrinkflation' taking place, i.e. a reduction in pack size with the price remaining the same.
More than a third (36%) state they plan to spend less on clothes, some 44% expect to buy less take-away food, while close to half (49%) plan to only spend on 'essential' products.
“Consumers are remaining frugal and resilient to cope with cost-of-living pressures, leaving them no choice but to draw on lessons learned from the global pandemic," commented Kristina Rogers, EY global consumer leader. "They are seeing the value they receive from brands diminish due to price increases and shrinkflation. Consumers are responding by switching away from brands, reducing their list of essentials and canceling subscriptions to maximise their budgets.
"With trust in retailers and consumer products businesses eroding across the board, (-7 percentage points for supermarkets since Feb. 2021), businesses must be prepared to accept that decisions they make now could have long-term implications on consumer loyalty and brands will need to double down on innovation and marketing efforts to compete.”
Elsewhere, the EY Future Consumer Index also found that close to half (46%) of consumers rely on technology to manage their daily lives, while the same percentage (46%) have availed of grocery delivery services in the last three months, a 12-percentage point rise since June 2022.
“Consumers have become habitual users of digital technology, becoming incrementally more reliant on it to provide them with ways to make life easier, save money, save time, work from home and reduce their environmental impact," Rogers added.
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