Nearly half (46%) of consumers worldwide believe food prices will continue to rise, according to the PwC Global Consumer Insights Pulse Survey 2023 in June. This is up from 42% in the previous survey in February.
Although consumers have cut back on non-essential spending since the start of the year due to higher food spending, they now expect to increase their spending in the coming period. More than a third (36%) of respondents say they will spend more on clothing and health and beauty products, compared to 28% and 27% in the last two surveys.
“Consumers are pessimistic about price growth over the next six months and anticipate further price increases, but, compared to previous surveys when they expressed their intention to save money, they now plan to allocate larger amounts to other expenses such as home renovation and travel. A similar trend is seen in Romania, where trade continues to be up by more than 5% in volume despite inflation still running at a high level of more than 10%, according to data published by INS in May. The pressure of inflation on the population’s income is increasingly difficult to bear. In this context, the Romanian government has set as a priority for the coming period the reduction of prices for certain basic food products by capping the commercial surcharge. It remains to be seen whether this measure will have the desired impact”, said Ruxandra Tarlescu, Partner and Retail Leader at PwC Romania.
The number of consumers willing to spend more on home improvement purchases has increased globally by 7%. This expected increase is similar to that indicated for other categories such as consumer electronics, sports and fitness equipment, home entertainment and online activities.
Far more consumers, 44% (up from 30% in February), expect their spending on travel, both domestic and international, to increase.
Although the e-commerce landscape is in flux, amid increased competition and a decline in some discretionary purchases, fully half of those polled intend to boost their online spending over the next six months. That is a significant jump from 43% in our previous survey.
That increase dovetails with consumers’ decisions to do more business with retailers that offer efficient delivery services − a recurring sticking point with e-commerce − and to increase their use of click-and-collect options. However, 50% of respondents also expect to continue shopping in physical stores, thus confirming the advent of the “phygital” consumer.
More consumers buy directly from brand websites
One salient finding from our survey is that consumers are increasingly making the decision to eschew traditional intermediaries and marketplaces in favour of buying directly from brands. Most consumers (63%) say they have purchased products directly from a brand’s website, and we expect that number to grow. An additional 29% say that although they have not done so yet, they are considering the D2C (direct-to-consumer) option.
To date, aggregators and e-commerce giants have had the advantages of scale, price and often ease of use, but it is clear that D2C brands and companies have their own advantages. Fully half of consumers say the main reason they are drawn to D2C websites is the authenticity of products, particularly when they are shopping for clothing, electronics, beauty and personal care items.
Most consumers willing to pay more for sustainable products
Eight out of ten consumers say that they would pay 5% more for a sustainable product. Asked how much above an average price they would pay for a variety of different goods, such as locally produced food at a farmers’ market, products manufactured with a lower carbon footprint and custom-made, or bespoke, items, more than four in ten say they would pay up to 10% above average, one in ten say they would go up to 30% and nearly 7% say they would pay even higher prices. Millennials and Gen Z, who typically espouse social consciousness and environmental justice, were the most open to spending more for the sake of sustainability.
The Global Consumer Insights Survey is a biannual study that seeks to keep a close watch on changing consumer trends. For the June 2023 Pulse Survey, PwC polled 8,975 consumers across 25 countries and territories
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