As global inflation continues to rear its ugly head, Australians are feeling the impact. In fact, over nine in ten (92%) Aussies say that they\u2019re aware of the increased cost of living, and three in four (76%) say they\u2019re at least moderately concerned about their personal financial security as a result.<\/p>\n\n\n\n
To better understand the pain points of consumers\u2014and how they might change their behaviors as a result\u2014Toluna conducted a survey of 1,058 Australians ages 18+ between May 5 and May 7.<\/p>\n\n\n\n
When asked how their personal finances compare to a year ago, half of Australians said they were worse off\u2014as opposed to about one in five who feel their situation has improved. Therefore, it should come as no surprise that pessimists outweighed optimists when we asked respondents to project their personal financial situation three months into the future. Forty percent of Aussies say they will be worse off financially\u2014double the amount that expect to be better off.<\/p>\n\n\n\n
Accordingly, consumer confidence is extremely low. Just one in four respondents say they\u2019re confident spending money in the coming months in light of the increased cost of living in Australia, whereas 44% have their doubts. For brands, this paints a clear picture. Australians are not only worse off than last year, but they\u2019re not all that hopeful for the near future, either. Assuaging those concerns with cost-effective offerings is going to be key to winning consumers over.<\/p>\n\n\n\n
Where are consumers feeling the impact the most? Above all else, consumers cite the grocery store as the biggest impact to their wallets. In fact, 81% of Aussies say they\u2019re feeling at least some impact in the grocery store\u2014and a third (34%) say the impact is large. The products that are causing the most pain? Over half of Australians (52%) say they\u2019re seeing a lot of price changes for fresh foods like fruits and vegetables, and over a third (34%) say the same for chilled foods like dairy and meat.<\/p>\n\n\n\n
As the cost-of-living crisis is expected to continue, we asked respondents how their grocery shopping might change in the coming months. In terms of specific behaviors, they said:<\/p>\n\n\n\n
\u2022 41% will change the amount of snacks they buy<\/p>\n\n\n\n
\u2022 37% will buy more own label products<\/p>\n\n\n\n
\u2022 31% will visit more stores in search of value<\/p>\n\n\n\n
\u2022 31% will change the brands they normally buy<\/p>\n\n\n\n
\u2022 26% will shop less often, but buy in bulk<\/p>\n\n\n\n
Aussies aren\u2019t just feeling the pain at grocery stores, either. They\u2019re feeling the impact of the rising cost of living at restaurants and clothing stores, too. Fifty-eight percent say they\u2019re feeling at least some impact when eating out, and the same amount feel at least some impact when buying clothing.<\/p>\n\n\n\n
In times of economic uncertainty, consumers are forced to consider their priorities and cut back on non-essential spending. So, we asked Aussies to assess the top three areas where they\u2019ll look to reduce spending in the coming months. It\u2019s easy to spot the theme:<\/p>\n\n\n\n
\u2022 45% will reduce spend on eating out<\/p>\n\n\n\n
\u2022 40% will reduce spend on takeaway food<\/p>\n\n\n\n
\u2022 38% will reduce spend at bars and pubs<\/p>\n\n\n\n
\u2022 33% will reduce spend on travel abroad<\/p>\n\n\n\n
Out-of-home food and beverage purchases are some of the first expenses to go, but what about the expenses that Aussies are reluctant to let go of? Thirty-seven percent say they\u2019re least likely to give up their TV subscriptions, while three in ten (30%) say they won\u2019t give up at-home alcohol consumption. Much like during the height of the pandemic, consumers plan to eschew out-of-home leisure activities for at-home entertainment.<\/p>\n\n\n\n
\u2022 58% are turning the lights off whenever possible to save on energy costs<\/p>\n\n\n\n
\u2022 44% are taking shorter showers to save water<\/p>\n\n\n\n
\u2022 26% say they will reduce their contributions to savings and investments to account for the increased cost of living<\/p>\n\n\n\n
\u2022 19% say they will withdraw money from long-term savings or investments to account for the increased cost of living<\/p>\n\n\n\n
While these findings paint a concerning picture of the state of personal finances in Australia, there\u2019s still an opportunity for brands to capture market share by demonstrating an understanding of consumers\u2019 challenges\u2014both through the products and services they offer, as well as how they price and market them.<\/p>\n\n\n\n