June 28th, 2023, Hoang Nguyen
The global landscape of consumer spending is undergoing significant shifts as concerns over inflation persist. Rising costs have prompted many consumers to alter their spending habits, leading brands and retailers to adapt their marketing strategies in order to meet changing consumer needs.
In YouGov's new global FMCG/retail report, “Changing purchasing habits in a cost-of-living crisis”, we look at how disposable income has changed in the past 12 months and how it is expected to change in the near future.
The report uses research across 18 international markets, in tandem with syndicated data from YouGov Profiles and Global Profiles, to help brands and retailers learn more about customer loyalty and navigate the challenges ahead.
Download YouGov's new 2023 report to learn more about:
- How consumers are reacting to financial hardship
- Which purchase categories they’re most price sensitive to
- Which spending categories they’ll cut back on and which they’ll prioritize
- What tactics they’re implementing to save money
Finding #1: Inflationary pressures are global in nature
Inflation concerns have been widespread, according to YouGov research. In the previous 12-month period, all 18 markets included in the report observed significant reductions in disposable income compared to the previous year. Particularly, parts of Europe and Canada faced the most significant negative shifts.
Consumers in Great Britain report the largest decline, with nearly two-thirds (65%) of Brits stating a decrease in their disposable income and only 20% reporting no change. Following closely on this downward trend are consumers in Canada (58% report a decrease in disposable income), France (55%), Denmark (54%), Poland (54%), and Sweden (54%).
On the other hand, Hong Kong (42%), Germany (36%) and Spain (35%) are the most likely to report no change to their finances, demonstrating relatively stable levels of disposable income.
India (25%) and the UAE (22%) are the countries where more than 20% of respondents experienced an increase in disposable income, while other countries saw lower levels of growth.
Finding #2: Food, fashion and utilities are among the most price-sensitive categories
In light of tighter budgets, individuals are now facing the need to reassess their spending priorities, leading to a heightened focus on pricing.
We looked across a range of spending categories and found that within the last six months, food-related products are among the top concerns with groceries being the primary focus for over half (55%) of global consumers and three in 10 (30%) saying they have been price-conscious about take-out.
Clothing and shoes also rank highly in terms of price sensitivity, with approximately 35% of global consumers showing concern about costs, a figure that’s on par with price sensitivity for utilities (36%).
Health and beauty products fall within the next tier of price-sensitive categories, with medicine and healthcare at 20% and cosmetics and beauty products at 18%.
Additionally, electronics (19%) such as laptops or TVs, out of home entertainment (19%) and travel (air travel and hotels) all demonstrate a notable level of price-sensitivity from consumers around the world.
Finding #3: Shoppers who purchase alcohol or fashion expected to spend less in these areas
Amid rising living costs, a significant portion of global consumers who buy clothes, shoes and accessories (39%) are considering reducing their expenditure on apparel in the coming 12 months, nearly double that of those who plan to increase (21%) their spending in this category. Meanwhile, a third of these consumers (34%) aim to maintain their current spending levels. Overall, this indicates a net decrease for planned spending on clothing, shoes and accessories.
The situation is slightly more favorable for the personal care and beauty category compared to fashion, with a lower proportion of consumers who buy these products intending to curtail their spending in the next 12 months (31%). Roughly two in five personal care/beauty shoppers intend to maintain their current spending, while a fifth (21%) plan to increase their expenditure in this category.
The situation is graver for the alcohol category, with 40% of those who make alcohol purchases saying they intend to reduce their spending in this area. While slightly more than a third (36%) indicate a stable level of spending in this category, just 17% say they’ll spend more.
Additionally, more than a third of consumers who buy toys, puzzles, games and books also intend to cut back spending in this category.
Understanding how changing household finances, price sensitivities and future spending patterns fit together will be critical to meeting consumers’ evolving needs, particularly at the market level. These insights can help brands and retailers communicate value propositions in a transparent and empathetic manner as well as offering solutions that resonate with people’s financial circumstances.
Learn more about how to navigate the current ever-changing FMCG/retail landscape in YouGov’s new report.
Methodology: The data is based on surveys of adults aged 18 and over in 18 markets. All surveys were conducted online in January 2023. Data from each market uses a nationally representative sample apart from Mexico and India, which use urban representative samples, and Indonesia, Malaysia and Hong Kong, which use online representative samples. Learn more about YouGov Surveys: Serviced.
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