Consumers are Less Confident about their Financial Savings
Many people are experiencing the impact of rising prices and are actively looking for ways to reduce their expenses. The increase in prices is due to various factors such as crude oil costs, population growth, climate change, and disruptions in global supply chains. There is a growing concern about economic uncertainty and personal savings, leading consumers to adopt a more cautious approach. This shift is driven by a belief in insufficient household savings, resulting in more individuals feeling financial pressure and dealing with everyday living expenses. As a result, as consumers adopt more conservative and recession-based spending habits, their brand loyalty diminishes. This makes them more open to exploring different shopping options and engaging in both high and low levels of consumerism.
Consumers are Cutting Down on Non-Essentials as a Result of Rising Grocery Costs
When analyzing price inflation, consumers are more likely to observe price hikes in essential items such as bread and dairy, highlighting the challenge they face in reducing their shopping expenses. Despite their efforts, consumers may struggle to stick to a budget and occasionally make impulse purchases on non-essential items, leading to subsequent feelings of guilt.
Even before the recent surge in the cost of living, many consumers already found grocery shopping for food and beverages to be costly. The increase in prices over the past year has amplified these concerns. As a result, this has led to a rise in the percentage of individuals who perceive grocery shopping as expensive. Interestingly, the percentage of individuals noticing price increases remains consistent. This indicates that a growing number of people have previously felt capable of managing living costs but are now encountering difficulties.
Consumers are Concerned about Rising Prices and Worry that Cost-Cutting will Impact their Physical and Emotional Health and Wellness
The increased emphasis on health in recent years, accelerated by the pandemic, has prompted many individuals to take an active approach to their well-being, leading to an overall sense of enhancement in their health. Consumers are driven to maintain these improvements for the long term. At the same time, a concern shared by more than half of global consumers is the impact of rising prices on their health and well-being.
This concern can be attributed to two primary reasons. Firstly, consumers perceive maintaining a healthy diet and consuming fresh foods as costly. This causes them to make trade-offs between nutrition and affordability. Secondly, consumers are apprehensive about the effect of rising prices on their emotional well-being, as it is associated with increased stress levels. This highlights the necessity for retailers, brands, and manufacturers to educate consumers on how they can uphold a healthy diet on a budget, by providing innovative solutions and guidance to challenge the notion that nutritious products come with a high price tag. Furthermore, this trend is also expected to fuel the demand for products and ingredients perceived to contribute to emotional wellness.
Promote Value for Money Rather Than Low Price
Amidst consumer spending cutbacks, it is crucial to acknowledge that they are not solely seeking the lowest prices, but rather looking for products they consider to offer great value for money. Consumers perceive products as providing good value for money when they strike a balance between quality and price. Moreover, products that exhibit maximum effectiveness will strongly appeal to them. This may encompass aspects such as nutritional value, multifunctional attributes, and sensory appeal. Consequently, brands, producers, and retailers should highlight the value and narrative behind their products to resonate with consumer needs.