The vast majority of consumers around the globe are concerned about rising living costs, with many turning away from brands in search of affordability.
According to the 12th edition of the EY Future Consumer Index, which surveyed 21,000 respondents across the United States and several other countries around the world, 94% of consumers now worry about the rise of living costs as they continue to navigate inflation, with 35% of consumers globally citing affordability as their top concern.
Consumer respondents say they are taking action to reduce spending in many areas of their lives, with more than a third (36%) planning to spend less on clothes, 44% expecting to buy less restaurant food and nearly half (49%) planning only to spend on essential products. In response to rising costs of food and nonfood items, 62% of respondents globally don’t feel the need to keep up with the latest fashion trends and half would now consider a private label brand for clothing, shoes and accessories.
More than two-thirds (67%) of those surveyed now prefer to repair rather than replace their possessions, challenging the traditional consumer desire of having to always own the newest items. More than half (55%) of consumers globally say brands are no longer important. The findings from EY reinforce the desire for value from consumers, as private label food and beverage sales continue to grow in both the U.S. and Europe.
“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. They are seeing the value they receive from brands diminish due to price increases and shrinkflation,” said Kristina Rogers, EY Global Consumer Leader. “Consumers are responding by switching away from brands, reducing their list of essentials and canceling subscriptions to maximize 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.”