Affordability, Value, and the Cost of Living

Delivery

This report comes in PPT.

Key findings

Struggling with the rising cost of living

Global consumers struggle to cope with the cost of living crisis, as inflation remains high whilst household income growth has not kept up with the pace of price rises. In 2023, global inflation is forecast at 7.0%, while the global disposable income per household is expected to decline by 0.2% in real terms over a year earlier.

Balancing budget and lifestyle

Consumers are adopting recessionary habits, such as trading down, being more selective in their spending, and indulging in small pleasures. It is important to remember that the burden of rising costs is not uniform across different incomes, with low-income consumers often impacted the worst by a cost of living crisis.

Consumer spending in cities

The cost of living crisis has highlighted the sensitivity of urban consumers to the rising cost of essentials such as food and utilities. Developing tailored strategies to meet the imminent challenges, especially those faced by the least well-off, is vital to building value for consumers, businesses, and other key stakeholders.

Navigating the new consumer reality

In the new consumer reality, businesses must avoid strategies such as raising prices or reducing pack sizes. Instead, they must shift their focus from solely competing on price to creating value, building consumer loyalty and generating growth.

Where do opportunities lie?

Companies can seize significant opportunities by focusing on education, food, non-alcoholic beverages, and services, as well as investing in technology to provide more value and a greater experience for consumers. The best opportunities benefit all stakeholders by creating avenues for growth, innovation, and value creation.