Consumers plan to spend less due to rising cost of living and concerns about climate change, said EY recently.
While 94% of consumer respondents globally remain concerned about the cost of living, almost 89% are also concerned about climate change, according to the 13th edition of the EY Future Consumer Index (FCI), which surveyed more than 22,000 consumers across 28 countries.
Survey highlights
- Over half (54%) of consumers are responding to their concerns by planning to spend less in the future, in an effort to save money (according to 73% of respondents) and because they feel they don’t need new items (49%).
- However, 39% of respondents from across the globe attributed spending less to helping the environment.
- Fashion accessories topped the list of product categories consumers plan to spend less on (cited by 61% of respondents) followed by toys and gadgets (51%) and clothing and footwear (44%).
- 80% of consumers plan to spend less on items for socialising as they look to spend more time at home (cited by 41% of respondents, an increase of 6 percentage points from October 2022).
- Seeking ways to stretch their budgets, respondents also plan to cook and entertain more often at home when compared with October 2022 (up 9% and 5%, respectively) and are sacrificing takeout food, with 43% now planning to order less, (up 12% from October 2022).
- Despite 61% of respondents stating private label is helping them save money and 64% stating that these products satisfy their needs just as well as branded goods, consumer interest in private label has declined across all categories.
Will consumers spend less in the upcoming festive season?
Despite results indicating less spending, that doesn’t mean consumers plan to buy less in the upcoming festive season, which is good news to retailers.
This festive season, large sales events will continue to attract consumers, with 61% of respondents globally planning to take part in events such as Black Friday and Singles’ Day (75% in China, 54% in Europe, 50% in the US), an increase significantly in China compared with November 2021, EY pointed out.
In addition, 71% stated that they plan to hold off on making some purchases until these event days, compared with just 48% in November 2021, survey results indicated.
FCI 13 also reveals a 16 percent point increase in consumers shopping mostly or only online this festive season, with a 14 percentage point decline in shoppers purchasing items “mostly or only in-store” when compared with last year.
However, with little changes to overall planned spending this season, respondents remain highly conscious of their available budgets, EY observed.
Unlike their counterparts in the US and Europe who are planning to spend less this festive season (39% and 35%, respectively), only Chinese consumers plan to spend less (11%) and many plan to spend more (45%).
Trust matters when it comes to spending—survey results show that 35% of consumers are increasingly willing to pay extra for brands they trust—up 10% from February 2022.
