Inflation triggers global consumer spending reset: Survey

Sustained inflation, tariffs, and supply chain disruptions have reshaped spending and consumer behaviour, according to findings from Blue Yonder’s 2025 Global Consumer Sentiment on Grocery Inflation Survey.

The survey, which covered consumers in Australia and New Zealand (ANZ), France, Germany, the Middle East, the UK, and the US, revealed that 85 per cent of respondents are concerned about rising prices, prompting significant changes in spending habits.

To manage high costs, 56 per cent of consumers globally are willing to cut back on discretionary spending, with clothing and footwear emerging as the most common target. This trend was consistent across all generations and regions. Only 7 per cent of those surveyed were unwilling to reduce other retail spending to offset grocery expenses.

Generationally, Baby Boomers are the most likely to reduce clothing and footwear spending (63 per cent), followed by Gen X (59 per cent), Gen Z (53 per cent), and Millennials (50 per cent), as per the survey.

Regionally, consumers in ANZ (67 per cent) were the most likely to reduce clothing and footwear expenses, followed closely by those in the US (62 per cent) and the UK (61 per cent). French and German consumers showed the lowest willingness to cut in this category, at 49 per cent each, while 47 per cent of consumers in the Middle East reported the same.

“With most consumers willing to adjust shopping habits in response to grocery inflation and mounting financial pressures, retailers – not just grocers – need to recognise the importance of building trust with shoppers through transparency, targeted promotions and affordability-first strategies,” said Ben Wynkoop, senior director, global industry strategist, Grocery & Convenience, Blue Yonder.

When identifying the causes of price inflation, 49 per cent of respondents pointed to newly introduced global tariffs as the main driver. This was followed by increased raw material costs (42 per cent), labour expenses in manufacturing and food processing (39 per cent), and increased profit margins among brands and manufacturers (33 per cent).

Views varied by region. Consumers in the US (65 per cent), the UK (56 per cent), and the Middle East (50 per cent) strongly attributed inflation to tariffs. In ANZ, 50 per cent of consumers blamed increased profit margins, while 48 per cent of French and 47 per cent of German respondents viewed higher raw material costs as the main contributor.

There were generational differences too: Baby Boomers were more likely to blame rising labour costs (52 per cent), while other age groups mostly pointed to tariffs as the key factor.

The impact of inflation is also reflected in changes to shopping behaviour. Sixty-five per cent of global consumers say they are purchasing fewer items across categories. Forty-two per cent are shopping at discount and wholesale stores, while 36 per cent are basing purchases on promotions and discounts. Thirty-four per cent reported switching to private label brands.

“During times of economic uncertainty, consumers often look for ways to save money on essential items such as groceries, from shopping at discount stores to seeking out sales and opting for private label brands. As a result, retailers tend to prioritise and invest more heavily in their owned brands to accommodate these changing shopping behaviours. Sophisticated retailers are becoming more vertically integrated from production to consumer to maintain greater control over their supply chain, increase profitability and deliver more affordable products to shoppers,” Wynkoop added.

ALCHEMPro News Desk (HU)