Zinklar has conducted a study in six countries – France, Germany, Mexico, Spain, the UK and the US – to better understand the effects of inflation on consumer habits in different industries. The insights discovered will help brands and retailers to adapt to new habits and consumer needs in the face of the rising cost of living.
For several years now, macroeconomic and social factors have had a direct and profound impact on consumer habits. The pandemic and the measures that were implemented to contain it have boosted a more digital and health-conscious consumer, who has increased his consumption at home and reduced his spending in establishments and leisure.
Just as some pre-pandemic habits were beginning to recover, new political and economic events have plunged us into a context of inflation that seems to have no end in sight. Increased rate of inflation, lower purchasing power, raised interest rates, higher prices of goods and services, real estate, food, energy… All these factors are only a visible part of a global economic crisis that is said to have only just begun.
The study we present today shows how high inflation effects have become the main concern of consumers, who have reported taking measures to cope with the increase and the higher cost of living.
- 62% of consumers report taking some measures to compensate for the rising cost of living, and this impact on habits varies in different economies. While in Spain the figure stands at 43%, in the UK up to 79% of respondents say they have done so.
- The most frequent measures to compensate for the rising cost of living are those that can be taken in the shorter term by modifying the consumer’s day-to-day activities and purchases. These include buying fewer clothes (62%), saving on the shopping cart (59%) and reducing spending in bars and restaurants (58%).
- Price sensitivity in the shopping cart is increasing. Among the measures most adopted to save money are: comparing prices better (65%), choosing products on promotion (64%), trying to reduce food waste (62%) and choosing private labels more often (56%).
- The increase in energy prices, due to the rising cost of many other products and services, is combined with concern about climate change, and 65% of consumers said they had taken some measure to reduce energy consumption. In addition, as long-term measures, up to 50% of those surveyed said they would consider installing solar panels at home.
It is important for brands to know how consumers will respond to the rising cost of living and what measures they will take to deal with it. Its impact is not the same in different countries and it is essential to understand how the rate of inflation will affect consumption in each region, sector and category.
Only continuous visibility of market changes and evolving consumer spending helps brands react to exceptional situations and emerge stronger with successful strategies.