More Consumers See Store Brands As Money-Saving Option

American consumers are focused on finding the best deals rather than prioritizing experiences, brand loyalty, or convenience, results of the EY Future Consumer Index (FCI) revealed, with many turning to private label products to save money.

Inflation and high interest rates continue to impact U.S. consumers' wallets as they head into the holiday season, with most still worried about the high price of groceries, creating opportunities for new brands or private labels in their homes. The FCI surveyed 1,500 U.S. consumers as part of a total effort to gain insight into the minds of 22,000 consumers across 28 countries. 

The Affordability First segmentation of U.S. consumers continues to take the top spot (36%, increasing 10% points since October 2022), while Experience First has seen a significant decline compared with the last festive season (12% of consumers surveyed, decreasing 11% points since October 2022), falling behind consumers in the Health First (26%), Planet First (14%) and Society First (12%) segmentations.

"Cost-strained consumers want to know they are getting a deal, or they simply won't prioritize a purchase," said Kathy Gramling, EY Americas Consumer Industry Markets Leader. "Traditionally, brands and retailers have turned to big moments like Black Friday and Cyber Monday to drive holiday demand, but we've seen that many consumers are trying to manage their budgets and have been preparing and shopping sales all year round."

As consumers continue to find new and innovative ways to save money, many are turning to private labels as a key alternative, the survey found. Two-thirds of consumers agree that private labels are helping them save money and 69% note that private labels satisfy their needs just as well as brands. Additionally, 57% claim that private labels are increasingly better-quality products. 

As consumers continue to re-evaluate their spending habits throughout the year, a shift away from brand loyalty is also evident. This is most notable within the food sector, where 64% of consumers are willing to purchase private-label packaged food and 63% are willing to purchase fresh food that's private label.

Also of note, 62% of consumers said they are extremely concerned about the rising cost of living. Also, 50% of consumers expect to spend about the same on the next big shopping sale vs. previous years while 39% of consumers expect to spend less this holiday season.

More than 8 in 10 U.S. consumers are planning to buy fewer items in general – across all categories – to save money. Many consumers are honing in just on the essentials, with 46% noting they're only purchasing essentials at this time. Additionally, findings reveal that 48% of consumers are shopping equally online and in-store for their seasonal shopping and sales events, while 42% are sticking mostly to online.

"These shopping habits support the need for a connected retail ecosystem and data-driven insights," said Isaac Krakovsky, EY Americas Retail Leader. "There is a huge opportunity for retailers to leverage new technology to enhance their consumers' shopping experience both in-store and online. Through AI, retailers can better anticipate customer needs, and orchestrate the right conversations to create personalized assortments, experiences and offers."