Higher cost of living impacts consumers spending
23 May 2023
According to the 12th EY Future Consumer Index, a recent survey of global consumer sentiment, people around the world are adapting to higher living costs by making changes to their spending habits.
The survey gathered insights from 21,000 individuals across 27 countries. It reveals that consumers are actively taking measures to cut down on their expenses. An overwhelming majority, 94% of consumers, express concerns about the escalating cost of living. Specifically, within the realm of food, 79% of respondents believe that food prices have risen in the past 3-4 months.
Interestingly, affordability has taken precedence over sustainability. Among the five consumer segments identified, the “planet first” group has experienced the most significant decline, decreasing from 25% to 16% of consumers.
The survey highlights several noteworthy findings. Globally, 94% of respondents express worry about the increasing living costs, 55% indicate that brand loyalty is no longer important to them, and 29% admit to switching to private label or store-brand products.
Furthermore, the survey reveals that consumers across all income brackets are adopting a more frugal approach to spending. Specifically, 44% anticipate purchasing fewer takeout meals, and 49% intend to limit their spending to essential products only.
Overall, 79% of consumers have noticed an increase in food prices in recent months, while 74% have observed certain brands reducing the size of their packaging without a corresponding decrease in prices — a phenomenon referred to as shrinkflation.