The cost of living crisis may be vexing the minds of marketers and politicians alike, but while nearly three-fifths (59%) of UK consumers are making changes to their spending habits, many expect to either maintain or increase how much they blow on essential and non-essential items.
That is one of the key findings of the latest wave of Alfresco Life research by out of home agency Kinetic Worldwide, which has tracked consumer attitudes throughout Covid-19 and post-pandemic life, and suggests consumer spending remains strong despite on-going financial concerns for some.
However, a further 6 in 10 revealed they are better off or the same financially as they were this time last year.
Essential spending on purchases such as housing (71%), communications and TV (70%), groceries (65%) and fuel (58%) were all revealed to stay the same or set to increase in the coming months.
The majority of people also intend to maintain or increase spending on non-essential items too, such as kids’ toys/clothes (65%), charity (60%), beauty (59%), holidays (55%) and alcohol and gambling (54%).
Despite tough times and increasing costs, most people still want to treat themselves (73%), socialise out of home (67%) and go out and enjoy themselves (67%).
Audiences are also expected to grow further as people are more likely to book holidays, the cinema and theatre tickets in the next three months, with public transport reach continuing to increase.
According to Kinetic’s research, consumers are now looking to minimise the impact of price increases on their lives by exploring ways of being smarter, savvier shoppers so that their money goes further.
For FMCG brands, it has never been more important to be front of mind, as consumers switch products (39%) and look to plan their meals in advance to avoid food wastage (31%).
When it comes to utility costs, 86% are making changes to help lower their energy consumption, making it a good time for brands to promote products and solutions which allow people to use more sustainable and energy efficient options, the report maintains.
For financial products, 41% do not plan to make any changes. However, those who are making adjustments, are looking to switch to cheaper products (26%) and better rates of return (17%).
Meanwhile, in health and beauty, a quarter of people plan to swap professional beauty treatments for DIY treatments (e.g. dyeing their own hair, doing their own nails). A further 32% also plan to shop around for the best price, highlighting the need for brands to demonstrate their value.
At a time when the cost of living is rising, brands have an important role to play in putting people first.
Over four in five people (83%) believe brands need to be transparent about any price increases, three quarters (75%) feel brands and ads need to acknowledge that things are harder for some people financially, and a further 72% feel more positive towards brands that help them find the best price.
Kinetic chief client officer Nicole Lonsdale said: “Consumers are continuing to spend, therefore brands should continue to spend as well.
“It will be particularly important for brands to be front of mind and advertise their products during the busy Christmas purchase journey and upcoming winter World Cup.
“Our research shows consumers say they feel more positive towards brands that are transparent and helpful, and formats and environments with stronger frequency such as public transport, can therefore create a feeling of reassurance and trust among consumers.”
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