PART 2: “I can no longer go to buy clothes for me and my children because the priority is basic living expenses” -25-34, has children under the age of 18 living at home
This is part 2 of our Critical Eye Investigation on…cost of living series of blogs. Click here to read the previous blog where we take an overview of our new market research looking at the cost-of-living crisis.
Here, we’ll focus on two regular spending activities: the food shop, and subscription services. With most of the adult population spending in these areas for essential and non-essential goods, we can see to what extent attitudes to spending have changed and for who it has changed the most.
In general, the vast majority of our 1,000 UK adults reported changing their attitudes to spending, with 78% claiming to be more cautious or strict with their budgeting.
A closer look at the people who reported they were now “extremely strict about what I spend my money on” shows a difference between men (16%) and women (27%). It might be the case that female-focused brands might have to work harder than they once did to be attractive to their audience, although this might also be a function of the level of caution men and women apply when answering questions.
This is a good point to think about, who is feeling the cost-of-living crisis the most and how they’re responding. When you break down the data from our cost-of-living crisis impact out of 10 question, differences begin to emerge, and you can quickly see millennials, Gen Xers and parents are feeling it the most.
Different groups feeling the effects of the crisis can also be seen in a consumer decision like supermarket choice, with shoppers at discount outlets like Asda and Lidl reporting a greater impact than those who shop at Waitrose. Whilst it might not be a huge revelation that Waitrose shoppers are more insulated from rising costs than Lidl shoppers, from a brand point of view it’s imperative to remember that different target audiences will have different challenges as a result of the cost-of-living crisis.
That’s not to say supermarket choice is entirely static. 15% of our respondents said they have changed where they do their food shop, with the vast majority of those doing so to shop somewhere cheaper. This is also reflected in the top 2 new food shop destinations being discount outlets Aldi (33%) and Lidl (28%).
Which reported their latest supermarket price comparison on the 3rd of February, with Aldi and Lidl being the top 2.
That being said, with 85% having stayed the same where they do their food shop in the face of rising prices, other factors like convenience of location and necessity of purchase may be protecting the sector.
Not every business is so lucky. 4 in 10 cancelled a subscription such as a streaming service, gym membership, or news outlet, in the last 12 months, with the overwhelming reasons given being related to budgeting and value.
Worryingly for subscription-based businesses, just 3% of our respondents said they were cancelling their service in order to replace it with a better one. In other words, people cancelling Netflix aren’t replacing it with Disney +. The audience as a whole is shrinking.
A dive into the numbers shows that the groups reporting a more significant impact are cancelling subscriptions at a higher rate. While 42% of everyone cancelled a subscription in the last 12 months, over half of the adults aged 25 to 44 and parents of children under 18 did.
With this brief glimpse into consumer behaviour during the cost-of-living crisis, we can see choices are being shifted by a need to spend less. With food shopping, outlets like Aldi and Lidl have benefitted by making a name for themselves as providing good value. With subscription services, people are more willing to dispense with the product altogether.
After we saw the tangible effect of the rising cost of living on consumer choices, we became curious about how people felt more generally about certain aspects of the crisis. We talk a lot about it, but when do people think it started? What do they think caused the crisis in the first place?
Check back here for part 3 where we explore broader opinions and perceptions of the cost-of-living crisis and how this might relate to the changes people have made in their spending.
To discuss how Critical Research might be able to help you, please contact Ben Farr.
