A recent survey conducted by GWI, an audience insights company, has shed light on the growing financial insecurity among UK consumers as the cost-of-living crisis worsens. According to the survey, nearly one-third of UK consumers are feeling insecure about their finances. The findings also revealed that inflation has had a moderate to dramatic impact on 62% of respondents, and a staggering 90% feel that the cost of living has increased compared to six months ago.
These alarming statistics have raised concerns about a possible recession and rising inflation, which poses a significant challenge for retailers. As a result, UK consumers are now facing a “consumer dilemma,” being forced to make difficult decisions about where to cut back on expenses. The survey identified treats/luxuries, nights out, eating out, and clothing as the top areas where consumers are likely to spend less.
What is particularly noteworthy is that the financial strain caused by rising costs is affecting both higher and lower earners. The survey revealed that 34% of higher earners and 47% of individuals in lower wage brackets are cutting back on their spending. Overall, 44% of UK consumers confirmed that they are spending less compared to the previous year.
Despite these financial challenges, the report did find that 50% of respondents still feel “somewhat financially secure.” However, as people make changes to their lifestyles in an effort to save money, the sustainability movement may suffer. The survey discovered that although 52% of consumers plan to be more cautious with their energy usage and 44% intend to walk or cycle more, these changes may not be sustainable in the long run. The report attributes this to the perception that eco-friendly alternatives come with a higher price tag. In fact, only 20% of UK consumers currently purchase sustainable clothing or are considering switching to green energy providers.
Jason Mander, Chief Research Officer at GWI, emphasized the importance for companies to understand the daily choices that consumers are making. He highlighted that even those who feel relatively comfortable financially are still facing the consumer dilemma and are making decisions throughout the purchase cycle. This understanding is becoming increasingly crucial for companies looking to adapt to consumer behavior and preferences.
The insights provided by the GWI survey offer valuable information about the financial concerns of UK consumers at present. With inflation on the rise and a cost-of-living crisis looming, individuals are forced to cut back on spending in various areas. This situation not only affects retailers but also poses a threat to sustainability efforts, as the cost of eco-friendly alternatives proves to be a significant barrier for consumers. Understanding these trends and the choices consumers are making is of utmost importance for companies aiming to navigate the current economic landscape effectively.
Useful links:
1. Money Advice Service – Coronavirus and Your Money
2. Office for National Statistics – Inflation and Price Indices
