Middle classes are most aware of rising prices and economic uncertainty
Middle classes are most aware of rising prices, inflation is causing consumers at all income levels to change their shopping behaviors and purchase decisions.
Since the start of the COVID-19 pandemic, business leaders have been looking forward to a time when consumer behavior would return to some kind of normality. Just when it looked like we might be reaching that moment, the world has been plunged into yet more crisis.
The latest edition of the EY Future Consumer Index captures consumer thinking in the weeks before the war in Ukraine began. It shows that in a time of rising inflation and global turmoil, people around the world have been fundamentally rethinking how they live their lives and asking themselves what relationship they really want with consumerism and its values.
The “Great Resignation” is already a well-documented phenomenon, with employees across the developed world quitting their jobs and rethinking their career plans. The EY Index points to profound shifts in behavior and attitudes as people lose interest in their pre-pandemic life goals, work patterns and consumption habits.
Over the last two years most people have spent less and gone out less. Working remotely has given them more choice over how they use their time and distanced them from the workplace, both geographically and emotionally. At first, this was tough. But many people have come to prefer this way of being, or at least found it to be far better than they imagined.
They feel the quality of their time is as important as the quantity of money in their bank account. They’d rather stay in than go out. They want to buy experiences rather than more stuff.
For corporate leaders, this cultural shift has profound implications. Power is shifting from employers to employees; from older people who are ending their careers early to younger generations who are less motivated by money and status, and more interested in living in line with different values; and from brands to consumers, as people spend more time at home and offline, making them harder to reach than ever.
Even before the war in Ukraine, consumers around the world were not optimistic about the future. Inflation was returning. Their work and personal lives had changed. EY's Index shows it’s no longer just low-income consumers who are worried.
While the middle classes are most aware of rising prices, inflation is causing consumers at all income levels to change their shopping behaviors and purchase decisions. Overall, 52% of consumers say the increasing cost of goods and services is making it harder to afford things. People are making the most changes in how they purchase non-essentials, such as clothing and electronics, to be able to afford gas and fresh food, where there are fewer alternatives.