More than half of consumers impacted by the rising cost of living

The quarterly EY Future Consumer Index showed that the majority of the 18,000 people surveyed plan to rein in their spending
More than half of consumers impacted by the rising cost of living

Lower-income earners were the most affected by inflation, according to the survey, with 62% of respondents saying that the rising cost of living is impacting their ability to purchase goods. Picture: Pexels.

A RECENT survey has revealed that over half of the world’s consumers are being impacted by the rising costs of living.

The quarterly EY Future Consumer Index was released this week, showing that the majority of the 18,000 people surveyed plan to rein in their spending.

Lower-income earners were the most affected by inflation, according to the survey, with 62% of respondents saying that the rising cost of living is impacting their ability to purchase goods and affecting their purchasing decisions.

Nearly 50% of middle-income earners also said they were affected and 42% of high-income earners.

“Driven largely by the inflationary impact on prices and the anticipation of new Covid-19 variants, the survey shows that consumers will continue to rein in their consumption, trade down to cheaper alternatives, and purchase fewer non-essentials,” a spokesperson said.

Some key items where respondents said they were spending less include clothing, beauty and cosmetics, and alcohol.

Around 1 in 5 respondents said they were seeking cheaper alternatives for fresh food.

Almost two-thirds of the respondents want to save more for the future.

“Despite an economic uplift in many countries since the pandemic, consumers are not optimistic about their future due to inflation, fundamental changes in their work and personal lives, and a growing unease around current global geopolitical issues, a trend we are also seeing here in Ireland,” said Ivan O’Brien of EY Ireland.

“With their spending power eroding and uncertainties looming, Irish consumers are having to rethink their spending choices, not only around ‘nice to have’ purchases, but also essential day-to-day goods and services.” 

The survey also showed that consumers are looking for experiences more, with 42% of people saying that they plan on spending more money on experiences in the next year.

Over one-quarter of respondents said that they were placing the planet ahead of affordability and experience when shopping and 56% said they will pay more attention to the environmental impact of their purchases.

“With less money to spend and growing economic and geopolitical worries, further fuelling their concerns over the planet and the social impact of their buying choices, customers are asking to not only be valued themselves but also whether the brands that sell to them demonstrate the values that align with their own," Ms O'Brien said.

“During the pandemic, we all rediscovered simplicity, sustainability and frugality, and this shift in consumer behaviour is likely to linger.”

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