London, Tuesday 27th September 2022 - New SurveyMonkey research from Momentive exploring the impact of the cost of living crisis on UK consumers found that half (49%) of Brits don’t feel confident they will be able to adapt and sustain their lifestyle during an economic downturn amidst soaring energy costs and surging rates of inflation. A further 74% of UK consumers stated that inflation will have a major impact on their personal spending.
Further to these findings, the Consumer Prices Index (CPI) rose by 9.4% in the 12 months to June 2022 (ONS). With this in mind it’s evident the concerns highlighted by the research are justified as consumers face the pinch of the cost of living crisis.
Shifting spending patterns and consumer reactions
The cost of living crisis is tightening consumer purse strings and spending habits are subsequently changing - 32% claim they consider themselves as being ‘thrifty’, and a further 11% categorise themselves as a penny pincher.
Whilst half of UK consumers don’t feel confident they can maintain their current lifestyle, the top three three priorities for Brits during an economic downturn are: family well being: 64%, food security: 63%, and employment: 51%.
Ultimately, convenience is on its way out and low cost products are in, with the majority of Brits (89%) prioritising lower cost items when it comes to shopping, versus the 36% who are still prioritising convenience over savings.
Eating out and subscriptions take a hit as consumers cut back on non-essential expenditures
There is further bad news set for the hospitality sector as Brits opt to eat in to save the pennies. Half (49%) are cutting back on dining out at restaurants due to financial concerns brought about by the economic downturn.
Streaming giants may also take another hit amidst an already challenging year, as a quarter (23%) of Brits have decided to cut back on streaming entertainment services. In fact subscription services in general could also take a hit with a further quarter (23%) of consumers cutting back on subscription-based personal products and 14% on music services due to cost cutting activities.
Brands need to demonstrate genuine authenticity
Brands need to be aware of these shifts in consumer spending habits and act accordingly to provide better pricing strategies as well as exclusive offers to assist consumers at this time. Asda serves as an excellent example of supporting consumers following its launch of the range of cut-price ‘basic essentials’. It seems the supermarket is on the right track with this strategy with 88% of Brits looking to switch to lower-cost products from brand-named products as a way of cutting costs.
Priyanka Carr, COO of Momentive, maker of SurveyMonkey, says: “Our research shows a distinct change in consumer spending habits as a result of ongoing economic uncertainty and rising costs. 74% of UK consumers stated that inflation will have a major impact on their personal spending, and brands need to be aware of this. Consumers are really struggling at this time to even put food on tables and therefore pivoting pricing strategies and increasing offers will be crucial not only for ongoing success but to remain relevant. Demonstrating genuine authenticity will prevail and will make the difference between losing and retaining loyal customers. We’ve learnt from our experience with Covid-19 that consumers will be watching how brands respond at a time of crisis—demonstrating care, concern, and putting this into action will be key."
Momentive (NASDAQ: MNTV), maker of SurveyMonkey, collects and analyses human sentiment at scale. Momentive products, including SurveyMonkey, GetFeedback and Momentive brand and market insights solutions, equip decision-makers at 345,000 organisations worldwide with the insights they need to make decisions with speed and confidence. Millions of users rely on Momentive to fuel market insights, brand insights, employee experience, customer experience and product experience. Ultimately, the company’s vision is to broaden the world’s perspective to shape the future of business. Learn more at momentive.ai.