Last week, the Office of National Statistics released the most recent data on the Cost of Living Crisis. The trend on spending stood out because, despite it being Christmas, December saw the largest monthly drop in retail sales since 2021 COVID-19 lockdown.

This was reflected in our December Pool; our monthly service in which we ask questions to the public for quick and effective opinions and thoughts. We asked if the cost of living had an impact on their holiday spending, and it was clear that it had, as Christmas was going to look very different for consumers this year, from food spending to gift giving.

A mother from London expressed, “We made the decision in our family to only spend money on the children, rather than gifting adults. In terms of actual gifts the children will receive fewer, and one of them is second-hand, which I wouldn’t have considered before.”

There is no doubt that the crisis worsened throughout last year, and it remains at the forefront of consumers’ minds in 2024.

How has consumer shopping changed due to the Cost of Living Crisis?

We discovered in our own qualitative research that the public wanted to discuss the cost of living in our pool shots. In April, when asked where people do their weekly shop, Lidl and Aldi were quoted for being the favourite due to being the most cost-effective.

In July, we asked the public whether they donate to charity as much due to the Cost of Living Crisis. The general consensus was that the crisis has pushed them to focus on themselves more, and limited their willingness to donate.

“I always try to be charitable, but if we weren’t in a Cost of Living Crisis, it would be something I would think about more.” Said one individual in Manchester’s July Pool.

By September, we asked more directly about whether they have seen the Cost of Living Crisis ease. The responses were varied, with one member of the public expressing that it’s not that it has eased, it’s that they’ve just got used to it.

One individual pointed to the government for not curbing the crisis, marking the issue with interest rates and how they are “coming down slowly, but they are still not where it needs to be.”

Jokingly, one individual in our street interview said the only thing which has begun to come down is cheese.

How is the Cost of Living Crisis affecting businesses?

For brands and businesses navigating the consumer landscape in 2024, this indicates a greater need for sensitivity and adaptability. Understanding the economic realities faced by consumers and tailoring to fit their priorities will be paramount this year. Returning back to our December pool, nearly all of our participants used the term ‘cut down’. Fitting this theme, businesses should consider value-conscious offerings to stay within consumers’ smaller budgets.

Written By
Stephanie Earnshaw
Business Development Manager

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