The cost-of-living crisis continues to strengthen its hold on UK consumers with two-fifths of the nation less comfortable on their income than a year ago, as found by the latest wave of our state-of-the-nation tracker, The QT. With recent calculations suggesting the average family’s monthly costs being £400 higher than last year, it is unsurprising consumers are feeling squeezed.
To alleviate the crisis’s impact, consumers are already changing their behaviours. 48% are now choosing one supermarket over another to save money (vs. 39% at the start of 2022). In fact, the7stars’ People First Response in a Crisis whitepaper found that two-thirds are already making compromises on what they buy or do to live more comfortably. With inflation at a forty-year high at nine percent, the pressure on finances is sadly going to increase for the foreseeable future, so these behaviour changes are likely to continue.
Despite economic woe growing, consumers’ environmental concern remains high. Our Sustainable Now whitepaper found that 44% of people are more concerned about sustainability than pre-covid, and a quarter consider the environment the top issue facing the UK according to YouGov. However, we also discovered a tension between environmental concern and a desire to do more to help. This is supported by Kantar’s finding that only 2 in 5 consider themselves eco-conscious in practice in the UK (versus 3 in 5 globally).
Further, being green often comes at a cost, studies have found that three-quarters of consumers are willing to pay five percent more to make sustainable purchases. However, the cost-of-living crisis is understandably having an impact on this willingness. 42% of shoppers now plan to focus more on price & quality over environmental considerations moving forward, up from 35% last year. And with higher prices already being the main reason to swerve greener choices, the tension between the environment and cost is intensifying. We’re understandably seeing the focus for many move to a ‘me’ rather than ‘we’ mentality.
Subsequently, consumers will be open to, if not expectant of, brands to help them navigate their green and financial concerns in unison in the future. Whether it’s by swallowing some of the production cost increases of more environmentally friendly products, identifying ways consumers can make greener but also cost-saving behaviour changes, or focusing NPD to deliver greener products and services at lower prices, there are a multitude of ways brands can help consumers cost-climate concerns.
IGD – Could the cost of living crisis derail sustainable shopping habits?
Delioitte – The cost of buying green
Industry Europe – Conscious consumption habits climb despite rising cost of living
Kantar – Is the cost-of-living crisis impacting consumer support of sustainable practices?