37% UK's low- and middle-income consumers buying only essentials: EY

Over 1,000 UK consumers were surveyed for the tenth edition of the EY UK Future Consumer Index. Around 27 per cent of all consumers said that they were adopting an ‘affordability first’ mindset. Higher levels of pessimism were also noted among low-income consumers; 46 per cent of them confessed that they feel financially worse off now as compared to this February. Moreover, 44 per cent anticipate their financial situation to worsen in 12 months and only 39 per cent feel in control of their lives — which is half of the 79 per cent high-income consumers who feel the same.

Even middle-income consumers seem to be feeling the pinch in their pockets with 33 per cent expecting their financial condition to worsen in the coming year. On the other hand, just 15 per cent of high-income consumers believe they will be financially worse off in the next 12 months with 61 per cent of this income bracket saying that they are looking forward to spending money on things that will enhance their lifestyle, the survey found.

The EY research data highlights a K-shaped recovery in which consumers from different income groups experience different rates of recovery after a recession.

“Our research reveals that instead of consumer behaviour staying relatively consistent, we are seeing consumers drifting towards two extremes. At one end are cash-strapped consumers who are watching every penny, at the other are those who are willing to spend and want retailers and brands to excite and entice them to do so. Navigating this K-shaped profile in consumer behaviour is key to surviving and thriving in the new economic landscape,” Silvia Rindone, EY UK&I retail lead, said in a press release.

ALCHEMPro News Desk (NB)