UK retailers need to draw up new marketing and promotional strategies to counter the continuing cost of living crisis, with spend on alcohol and apparel, as well as subscriptions, electronics and even beauty products facing the axe, as global pressures continue to wreak havoc with household budgets.
That is according to Blue Yonder’s 2025 Global Consumer Sentiment on Grocery Inflation Survey, which reveals that sustained inflation, supply chain challenges and global tariffs are influencing grocery spending and broader consumer behaviour across generations and regions.
The survey, which quizzed consumers across the UK, the US, Germany, France, the Middle East, Australia and New Zealand (ANZ), found that 85% of shoppers are concerned about inflation’s impact on grocery prices, illustrating consumer unease and clear changes in purchasing decisions.
It reveals that nearly half (49%) of all respondents believe US president Donald Trump’s tariffs are the leading factor behind inflated grocery prices, followed by increased costs for raw materials (42%), increased labour costs in manufacturing and food processing (39%), and increased profit margins for brands and manufacturers (33%).
Inflation’s grip on grocery bills is fuelling global concern from consumers. Almost two-thirds (65%) report they would buy fewer grocery items across categories to cope with price increases, while 42% would shop more at discount and wholesale stores.
In addition, over a third (36%) would prefer shopping based on promotions and discounts and switching to private label brands (34%).
Alcohol is facing the biggest budget cuts compared to other grocery categories, with one-third (33%) of shoppers saying they would reduce alcohol purchases in response to inflation price increases.
To offset high grocery costs, many consumers noted they would be willing to cut back on discretionary spending.
Globally, more than half (56%) of consumers are willing to cut back on clothing and footwear – this was also the top response by generations and regionally – although UK shoppers were even more keen, with nearly two-thirds (61%) saying they will slash spend on this category.
Other top area consumers are willing to cut back on include consumer electronics (46%), streaming/gaming subscriptions (43% but 54% in the UK), personal care and beauty (36%), appliances (33%), and automotive purchases (28%).
Only 7% of shoppers were not willing to reduce their other retail spending to offset grocery costs. Generationally, Baby Boomers are most likely to scale back on clothing and footwear (63%), compared to Gen X (59%), Gen Z (53%) and Millennials (50%).
Blue Yonder senior director and global industry strategist for grocery and convenience Ben Wynkoop said: “The findings underscore just how widespread and deeply felt the impact of inflation is on consumers’ everyday lives.
“From buying fewer grocery items and cutting back on alcohol purchases to shopping at discount retailers and reprioritising spending across other categories, consumers are navigating prolonged uncertainty – and retailers must adapt accordingly.
“With most consumers willing to adjust shopping habits in response to grocery inflation and mounting financial pressures, all retailers – not just grocers – need to recognise the importance of building trust with shoppers through transparency, targeted promotions and affordability-first strategies.
“Leveraging advanced technology for artificial intelligence-driven scenario planning and visibility across the end-to-end supply chain can help grocers mitigate tariff-related disruptions by increasing agility, resilience and cost savings.”
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