June 20th, 2023, Bhawna Singh
Around the world, many consumers are feeling the effects of rising inflation and the rising cost of living, forcing them to cut back in areas of spending to try and balance their finances. Latest data from YouGov’s Global FMCG/CPG & Retail whitepaper 2023 – Changing purchasing habits in a cost-of-living crisis, shows that more than two in five (43%) consumers in Singapore have seen a decrease in their disposable income over the past 12 months while 29% have seen no change. With only 16% having experienced an increase, overall, the negative impact on disposable income outweighs the positive by more than two-fold.
Concerns over the impact of inflation on spending in the next 12 months runs high with seven in ten Singapore adults (70%) saying they are quite or extremely worried and only a meager 5% saying they are not worried. Among the different age groups, worry peaks among 35–44-year-old-adults, where more than a third are extremely worried about their future spending (35%).
The report also explores the products and services that are showing increasing price sensitivity in the past six months.
Food-related products rank in the top four most price-sensitive categories with groceries being the top concern for more than half of Singapore consumers (56%) and more than two in five (44%) conscious of the price of take-out food. Over a third have been concerned about the cost of utilities (38%) and clothing and shoes (36%). Air travel and hotels and mobile phones fall within the next tier of price-sensitive categories (at 29% each), along with medicine and healthcare products (27%), electronics (24%) and financial & investments products (23%).
With price sensitivity increasing across a number of products, brands and retailers will have to actively engage in pricing activities and leverage their customer-based brand equity to stay afloat in the middle of this storm.
Looking ahead, it appears that spending on alcohol and toys/puzzles/games/books is likely to be the most impacted by inflation with around half of Singapore consumers saying they do not intend to buy these items in the next 12 months, and more than two in five planning to cut back their spend on each.
The clothes/ shoes/ accessories category is also likely to experience an impact with more than two in five (43%) consumers planning to reduce spend on this category in the next 12 months, more than double of those who intend to spend more (16%), with a quarter maintaining their spend (25%).
The personal care and beauty category fares slightly better than fashion with a lower proportion intending to curb their spend in the next 12 months (33%), but it is still twice of those who intend to increase their spending in this category (16%).
Spends on household supplies and food & beverages are likely to remain the same, with a higher proportion of consumers claiming they will spend the same amount than those who may reduce or increase their spending.
In order to manage their spends better, consumers are resorting to a number of smart shopping tactics. Nearly half of Singapore consumers have used discount codes or coupons to save money (48%), closely followed by waiting for sales to buy their desired products (46%). Price comparison is the next best tactic (46%), followed by keeping a tight budget (45%) and buying alternative cheaper brands (40%).
Using discount codes to apply a reduction in price is likely to remain the top future tactic, with more than half of Singapore consumers saying they will do this to save money in the next 12 months (55%). This is followed by comparing prices across retail channels (51%) and waiting for the price of products to be slashed in sales or on sale days (49%).
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Methodology
The insights in this report are drawn from a recent global YouGov Custom Survey focusing on the FMCG/CPG and Retail sectors. Covering 18 global markets of more than 19,000 respondents, our survey was fielded between 17th January 2023 and 1st February 2023. Data for Singapore is based on a nationally representative sample of 1066 respondents.
The report explores how consumer purchasing behaviour adjusts to higher prices, the FMCG/CPG categories consumers are cutting back - or spending more on - and investigates the tactics consumers are implementing to save money.
The YouGov panel provides a naturally accurate and representative view of the population. Data is adjusted with mild weighting using interlocking demographic characteristics—methodology considered advanced in the market research space.