Consumers resilient in the face of uncertainty, Accenture finds
A majority of people expect their disposable income to remain the same or improve within the next 12 months despite economic uncertainty. However, more than half of consumers still expect the coming years to be “a struggle”, thanks to the impacts of the pandemic and cost of living crisis on their household budgets.
Accenture has been conducting a series of surveys to test the pulse of consumer outlook and sentiment since the start of the Covid-19 pandemic. The most recent investigation from the management consultancy saw it survey 10,100 consumers from 16 countries: Australia, Brazil, Canada, France, Germany, India, Italy, Japan, Mexico, Saudi Arabia, Singapore, Spain, Sweden, United Arab Emirates, the US and the UK.
Inflation is expected to outpace real earnings until mid-2024, while economies continue to struggle to avoid falling into recession amid an era of slow growth, leading to 85% of respondents reporting that they are “currently living with uncertainty”. Even so, the responses from this survey suggest that consumers around the world are cautiously optimistic about their personal situations at present.
Amid the continued uncertainty of the sustained economic slowdown, 73% of consumers expected their disposable income to stay the same or improve in the next year. That was made up of 41% who expected more of the same, and 32% who expected improvement.
Considering the changes the respondents had endured in the last 12 months, this was decidedly upbeat. A 38% portion said their economic circumstances had deteriorated over the last year. But looking ahead, just 27% thought the picture would continue to worsen for them.
As such, it seems that many are planning to change their spending habits in the near-future. While most expected ‘non-essential spending’ is still at reduce levels, the portion by which it will decline has decreased substantially, year on year. In 2022, for example, 47% of consumers said they would spend less on luxury products in the coming six-to-12 months – but for 2023, that has is just 22%. At the same time, while 31% said they would reduce spending on leisure travel, and 20% on clothing, both those categories now see an expected positive change in the coming year – of 7% and 4% respectively.
Even so, the majority of consumers are still worried about what the future holds. A 56% majority said that they felt the coming years would be “a struggle”, while 68% were more cautious about the decisions they make. With the cost of living crisis having eroded an estimated £2,300 from their household budgets in real terms, it might be easy to see why that is.
As such, even as climate change sees a succession of natural disasters sweep the globe each summer, consumers remain most concerned about the national economy. A 66% portion of respondents identified it as their chief worry. But the environment did still take precedent over everything else – at 63% – suggesting that retailers cannot simply discount the sustainability concerns of consumers in favour of cheaper goods.
Jill Standish, senior managing director and global lead for Accenture’s retail industry practice, said, “To succeed in this market, retailers and brands need to understand the nuances of the consumer as an individual. People are demonstrating a resilient mindset and ability to deal with adversity, withstand shocks, and adapt to continued uncertainty. Now, retailers and brands must do the same. It means taking a holistic view of the consumer and committing to a continuous strategy of reinvention that allows them to quickly adapt and accelerate as disruptions and crises arise over time.”
