Surging costs causing UK consumers to cut back on sustainable choices
Intrum’s annual European Consumer Payment Report (ECPR), which surveys 24,000 European consumers on payment behaviour and the economic outlook, shows that record increases in the cost of living have set off a wave of bill-anxiety, forcing consumers to make difficult spending choices.
Two thirds of UK consumers (65 per cent) say they would like to buy more sustainable goods and services, but the rising cost of living makes it challenging for them to do so. Seven in 10 are changing how they spend money and 66 per cent say that, because of inflation and increasing costs, they now can’t pay a premium for sustainable products. Of those changing their spending behaviour, half say they plan to shop more in discount stores in the next year.
Other sectors likely to be affected by changing consumer spending patterns are not-for-profits and charities, with one in five of those changing their spending behaviour saying they will give less to charity in the next year.
“The cost-of-living crunch has understandably made struggling consumers look for discounts, leaving less scope to pay a premium for sustainable products. This can create additional challenges for governments, businesses and other organisations striving to keep sustainable consumption and the green transition at the top of the agenda,” says Vanessa Söderberg, Intrum’s Global Sustainability Director.
The ECPR findings show, however, that most UK consumers will still ‘punish’ companies that they believe to be prejudiced. Sixty per cent said they would stop spending money with a company if they believed it discriminated against consumers by racial or socioeconomic profiling.
Other key findings in European Consumer Payment Report 2022 include:
Consumer confidence is lower now than in the darkest days of lockdown
- More than half worry they won’t be able to retire comfortably (57%) and that they aren’t saving enough for the future (60%). This is up from 54% and 54% last year.
- Unlike in recent years, older consumers are more likely to be affected (for example, 83% of Gen X say they are worse off than they were last year, compared with the UK average of 63%).
Inflation and lack of confidence is impacting consumer spending patterns
- Seven in 10 UK consumers say they have become increasingly aware of unnecessary costs.
- Consumers changing their behaviour are cutting back on meals out to compensate for rising prices, which is bad news for the hospitality sector and others that were starting to regain their footing after the impact of Covid.
- Four in 10 are struggling to make ends meet and expect to default on a utility bill in the next 12 months. Three in 10 have already missed a payment in the past year.
- Consumers who expect to miss bill payments in the next 12 months say they are most likely to default on e-commerce and online store bills.