PITTSBURGH–(BUSINESS WIRE)–With the holiday season fast approaching, rising prices are having a negative impact on consumer confidence. On average, 82% of consumers in France, Germany, Italy, Spain, the UK and the US are less confident about spending, according to new report from First Insight The statement of consumer spending: The impact of inflation on international consumers. The survey found that the top three expenses that hit consumers the hardest are groceries, gas and restaurants.
On average, 68% of consumers are most affected by rising food prices, notably in Germany at 78%, followed closely by the UK and Spain. Overall, consumers are discounting branded goods the most in grocery stores, followed in descending order by alcohol and spirits, meat and seafood, snacks, organic foods, and fresh produce.
At least three quarters of consumers in the six countries are less confident about spending, ranging from 75% in France to 86% in Germany. German consumers report the biggest inflation-induced change in their shopping habits and say they buy more for bargains and stick to a budget. On average, 41% of consumers surveyed believe they get the best value for money buying online and they get the cheapest buying from independent retailers.
“Inflation is having a negative impact on consumer confidence not just in the US, but across the UK and Western Europe as we enter the critical holiday shopping season,” said Greg Petro, CEO of First Insight. “As belt-tightening becomes the norm, retailers and brands around the world will need to redouble their efforts to identify greater opportunities to deliver targeted promotions and inducements to engage with consumers, while refining pricing and promotion strategies to preserve margins.”
In terms of spending, dining out, nightlife and travel, some of the top categories consumers are cutting across, followed by apparel/shoes/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 reducing their travel costs by taking fewer vacations.
The threat of recession concerns at least 92% of consumers in all countries, the United Kingdom being the most concerned at 96%. Many consumers, 66% on average, think a recession is already underway. Overall, almost a third of consumers acknowledge that they are saving less due to high prices, and 17% say they are dipping into their savings to deal with the cost of living crisis.
Download the full report here.
First Insight, the global leader in next-generation experience management (XM), is transforming the way companies make better decisions that lead to a sustainable future. Its customers include some of the world’s largest vertically integrated brands, department stores, consumer products companies, mass retailers and wholesalers. For more information, please visit www.firstinsight.com.
First Insight’s findings are based on a survey conducted through its proprietary platform. The report is based on samples of 1,000 adults each in France, Germany, Italy, Spain, the United Kingdom and the United States, sent by email in September 2022. The samples were proportionately balanced by generation, gender and household income bracket. Further details of the results are available upon request.