Recent First Insight Report Reveals Groceries, Gas, and Dining Out Are Top Categories Hitting Consumers Hardest Across Boundaries
With the holiday shopping season fast approaching, rising prices are negatively impacting consumer confidence. On average, 82% of consumers in France, Germany, Italy, Spain, the UK, and the US have less confidence to spend, according to First Insight’s new report The State of Consumer Spending: Inflation’s Impact on International Consumers. The survey found that the three top expenses hitting consumers hardest are groceries, gas, and dining out.
“As belt-tightening becomes the norm, retailers and brands globally will need to work harder to identify greater opportunities to offer targeted promotions and incentives to engage with consumers, while honing pricing and promotion strategies to safeguard margins.”
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On average, 68% of consumers are most impacted by rising food prices, most notably in Germany at 78% with the UK and Spain closely following. Consumers overall are cutting back most on name brand products at grocery stores, followed in diminishing order by Alcohol & Spirits, Meat & Seafood, Snacks, Organic Food, and Produce.
At least three-quarters of consumers in all six countries are less confident to spend, ranging from 75% in France to 86% in Germany. German consumers report the most significant inflation-induced change in their shopping habits and say they are shopping more for deals and staying within a budget. On average, 41% of consumers surveyed feel that they get the best value by shopping online and receive the lowest value by shopping with independent retailers.
“Inflation is negatively impacting consumer confidence not only in the US, but throughout the UK and Western Europe as we enter the critical holiday shopping period,” said Greg Petro, CEO, First Insight. “As belt-tightening becomes the norm, retailers and brands globally will need to work harder to identify greater opportunities to offer targeted promotions and incentives to engage with consumers, while honing pricing and promotion strategies to safeguard margins.”
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In terms of spending, dining out, nightlife, and travel are some of the top categories consumers are cutting back on across the board, followed by Apparel/Footwear/Accessories and Entertainment. Individual differences between countries show that 56% of consumers in Spain are reducing their spending on nightlife entertainment while 53% of those in Italy are cutting travel costs by taking fewer vacations.
The threat of recession concerns at least 92% of consumers in every country, with the UK most concerned at 96%. Many consumers—66% on average–believe that a recession is already underway. Almost one-third of consumers overall acknowledge that they are saving less because of high prices, and 17% report that they are tapping into savings to cope with the cost of living crisis.
