European consumer sentiment survey: How current events in Europe are shaping consumer behavior

Even as COVID-19 lingers, European consumers are preoccupied with somewhat different threats: the perception of price increases, and the ongoing Ukraine invasion.

Across the continent, the pattern holds: Europeans are anxious about the state of their countries’ economies, and worried about the future. Russia’s invasion of Ukraine and price inflation overshadow other concerns, and consumer anxieties in turn are impacting confidence in household finances and national economies, especially among vulnerable populations.

Worried about spending more on food, transport and fuel, consumers report cutting back on less essential items. Most say they’ve changed their shopping behaviors in recent months, trading down to more affordable brands and retailers. With no relief clearly in sight, 2022 continues to prove a challenging year for the continental consumer.

Our findings are based on consumer pulse surveys of at least 1,000 respondents in each of the following five countries: France, Germany, Italy, Spain, and the United Kingdom. At the bottom of the page, the full European report.

European consumers are experiencing new sources of concern and tumbling confidence in overall economy

Despite the pandemic’s impact, rising prices and the conflict in Ukraine have now by far overtaken COVID-19 as the foremost concerns of European consumers. For 44 percent of survey respondents, price inflation was their chief source of concern, while a quarter placed the invasion of Ukraine in this position. Anxiety about prices is significant among low-income consumers and millennials, while the conflict in Ukraine weighs more heavily on the minds of high-income consumers and baby boomers. Almost two out of three consumers across Europe feel troubled about their own country’s current economic state, and most anticipate poor prospects for recovery. This is particularly true of vulnerable consumers such as the elderly. Overall, expectations of economic recovery have significantly decreased in the last months, sinking lower, even, than during the COVID-19 lockdowns. Economic concern is now more than double what was reported in October 2021—and could still grow.

Watching prices rise, consumers cut back where they can

A vast majority of respondents across countries have observed an increase in prices: more than 90 percent see this, particularly in their grocery bills, with ascending costs of household supplies, pet food, kitchen items, and personal-care products also noted. Two-thirds of consumers surveyed express concern about these increases, and expect this trend to continue over the next 12 months. In particular, consumers perceive that they are spending more on food and essentials, gasoline and transport, and energy and utilities. More than half of European consumers surveyed, especially baby boomers, say they have become more conscious of their energy usage. As spend on such essential products rises, people have been cutting back elsewhere: putting less into their savings, and spending less on nonfood discretionary items. Most expect further cuts to come.

Under pressure, shoppers change their habits—and trade down

In response to economic pressures such as price increases, more than two-thirds of consumers have changed their shopping behavior—for example, switching brands or delaying purchases. Prices, promotions, and value for money are key decision criteria in the choice of new retailer or new brand, followed by availability of products. Downtrading is a clear and widespread trend, and more than half of those switching brands are trying out private-label alternatives. Consumers who changed retail stores turned to discounters, while shopping less in convenience stores, specialty stores, and hypermarkets. Consumers in Germany report shifting to discounters, while consumers in Italy were the only group to report increased purchases in supermarkets. Two-thirds of consumers tried a new shopping behavior in the last four to six weeks, with younger consumers—Gen Z and millennials—more likely to break old habits.

As the conflict in Ukraine develops, and the European economic landscape evolves over the months ahead, we will keep monitoring consumers. Watch for our next consumer pulse, coming soon.

These exhibits are based on survey data collected in Europe from April 12–18, 2022. Check back for regular updates on European consumer sentiments, behaviors, income, spending, and expectations.

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