The latest survey conducted by the EY UK Future Consumer Index reveals that Britons are increasingly considering both “value and values” when making their purchasing decisions. While low- and middle-income consumers are cutting back on their spending due to economic uncertainty, high-income consumers seem to be largely unaffected. However, one common trend among all income groups is the growing focus on sustainability, which aligns well with the current thrifty approach to consumption.
Affordability has become a crucial factor for British consumers, with 37% of low- and middle-income consumers now restricting their purchases to essential items, a significant rise from 26% in February. Consumers of all income groups are also opting for more economical and sustainable choices. According to the survey, 32% of consumers are switching brands in search of cheaper alternatives, an increase from 26% in February. Affordability has gained even more importance since then, with 27% of all consumers adopting an “affordability first” mindset.
When it comes to discretionary purchases, consumers are showing a preference for thriftiness. Around 49% of respondents are buying fewer clothing, shoes, and accessories. However, there is a growing divide between high-income consumers, who are less concerned about affordability, and low- and middle-income consumers, who are increasingly worried about their financial situation. This division reflects a “K-shaped recovery,” where different groups experience varying rates of recovery after a recession.
The research highlights that low-income consumers are particularly pessimistic, with 46% feeling financially worse off compared to February. In contrast, only 39% of low-income consumers say they feel in control of their lives, while 79% of high-income consumers feel the same way. Middle-income consumers are also preparing themselves for difficult times, with 33% expecting to face financial challenges in the next 12 months. On the other hand, 61% of high-income consumers express excitement about spending money on lifestyle improvements.
Interestingly, consumers across all income groups are making more economical and sustainable choices. The survey shows that 90% of respondents are actively trying not to waste food, and 55% are paying closer attention to the environmental impact of their purchases. Moreover, 70% prefer to repair items instead of replacing them. This shift in consumer behavior is also evident in the fashion industry, as 75% of respondents state that they are less interested in following the latest trends.
In conclusion, the EY survey highlights that consumers are now seeking both value and values. Brands and retailers need to find innovative ways to deliver affordability and sustainability in order to capture the attention of the “K-shaped consumer.” The companies that can adapt to this changing market landscape and identify opportunities will likely be the most successful.
Useful links:
1. [Guide to Sustainable Shopping](https://www.greenpeace.org.uk/sustainable-shopping-guide/)
2. [Affordability and Money-Saving Tips](https://www.moneyadviceservice.org.uk/en/categories/cut-your-costs)
