As the cost of living crisis continues to rise globally, consumers have drastically adjusted their spending behaviours, with the majority (53%) of global consumers “holding back” on non-essential spending. Fifteen per cent of consumers have stopped non-essential spending altogether, as per the survey, which captured the views of 9,180 consumers across 25 territories.
The survey also found the majority of consumers expect to reduce their expenditure across all surveyed categories over the next six months, a significant decline in planned spend across all categories since the previous pulse survey, June 2022. Industries including luxury and premium products, travel, and fashion expect to see the greatest portion of consumer spend reductions over the next six months, whereas groceries is expected to decline the least.
Consumers globally are shifting their consumption habits in-store and online as the cost-of-living surges and supply chain disruptions impact product availability and delivery times. As a result, almost half (49%) say they are buying certain products when on offer/promotion, 46% are looking to retailers offering better value, 40% are using comparison sites to find cheaper alternatives, 34% are buying in bulk to save cost, and 32% are buying retailers ‘own brands’ in order to find savings. Demographically, Generation X is the “most-concerned” (47%) and has taken action on non-essential spend, Baby Boomers lead concerns to “some extent” (33%) while taking action, whereas Millennials lead the way when “concerned”, but not changing behaviour.
While more than half of consumers (56%) said rising prices remains the most frequently experienced issue when shopping in-store, supply chain issues also dominate with larger queues and busier store locations (30%), as well as product availability (26%) impacting consumer behaviour. Supply chain disruptions for in-store shopping appear most prevalent for consumers in Australia (36%), United States (35%) and India (34%). For online shoppers, rising prices (48%), product availability (24%), and longer than expected delivery times (24%) lead reported concerns.
Consumers are planning to reduce their spending across all surveyed retail categories over the next six-months, with the greatest decrease forecast in luxury/premium products or designer products (53%), travel (43%), virtual online activities (42%), and fashion – such as clothing and footwear (41%). However, there still remains an appetite for future spend, with 40% indicating they will look to treat oneself/others, whereas 39% view them as better quality. Groceries (24%) had the least reported planned spend reduction.
Despite a planned spend reduction and a challenging economic environment, consumers say they are still willing to pay more for sustainable product types. Overwhelmingly, more than three-fourths (78%) are willing to pay higher for a product that is produced/sourced locally, or made from recycled, sustainable or eco-friendly materials (77%), or produced by a company with a reputation for ethical practices (75%).
In June 2022, consumers’ frequency of daily/weekly shopping, which had been on an upward trajectory during the pandemic, looked to be shifting back to pre-COVID times. In this pulse, continued stability shows the majority of consumers expect little change in their shopping channel habits across online, in-store and click and collect in the next six months. In-store shopping remains largely stationary year-on-year as the most common medium of consumption in 2022 (43%), whereas use of mobiles/smartphones (34%), PCs (23%), and tablet consumption (15%) have all marginally declined. The survey finds there is a continuing trend in consumers stating they never purchase products via tablets (51%), smart home voice assistance (64%) and wearable devices (71%). These numbers are all on the rise since the last PwC Global Consumer Insights Pulse Survey in June 2022.