EY Future Consumer Index: Rising Cost of Living, Tighter Grip on Finances

• Consumers prioritizing affordability over sustainability for the first time since the mid- pandemic
• Western markets pessimistic on future economic outlook compared to emerging markets
• Growing challenges for fast fashion and customer retention as 64% of consumers ignore the latest fashion trends

Consumers globally are preparing to hunker down for a long financial squeeze, as the increasing cost of living and geopolitical uncertainties push them to seek financial control amid low economic confidence, according to the latest EY Future Consumer Index (FCI).

The 10th edition of the global research of 18,000 consumers, conducted between May 18 to June 7, 2022, finds that 79% of consumers say their finances are a concern, with 62% expecting their living costs to increase even further over the next six months. These concerns over personal finances are affecting the majority of all income levels, from low income (87%) middle class (77%) to high income (64%).

With consumer confidence shrinking, the research reveals a significantly pessimistic economic outlook from the Western markets when compared to emerging/other markets. Many more consumers from the US (54%), UK (65%) Germany (84%) and France (85%) state they believe life will remain the same or worse over the next three years, compared to Brazil (21%), India (24%), Saudi Arabia (37%) and China (38%). With this continued "always-on emergency mindset" adopted from the pandemic, consumers globally are increasingly focusing on controlling their spending and re-adjusting priorities to maintain their values and lifestyles in the face of disruption.