With pessimism about the economy rising in Europe, consumers there continue to switch to less expensive products or postpone purchases (referred to as trading down), but a larger proportion of younger consumers report doing so than their older counterparts. Between 80 and 95 percent of Gen Z and millennial consumers in France, Germany, Italy, Spain, and the United Kingdom reported trade-down behaviors in late fall 2024, senior partner Jessica Moulton and colleagues note. In comparison, 52 to 81 percent of Gen Xers, baby boomers, and the Silent Generation are trading down.
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A bubble chart shows the percentage of respondents in 5 European countries—France, Germany, Italy, Spain, and the UK—who reported trading down than in the previous quarter (Q3 2023), segmented by generation and income level. When all 5 nations combined are viewed by generation, the percentage-point change is largest among Gen Z respondents at 89%, an increase of 3 percentage points; millennials at 82%, no percentage-point change from Q3 2023; Gen X at 73%, 1 percentage-point increase; and boomers and the Silent Generation at 59%, a decrease of 2 percentage points. The percentage of respondents who reported trading down also varied by income level, though less dramatically: 77% of low-income respondents reported trading down, compared with 72% of middle-income respondents and 72% of high-income respondents.
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Footnote: Responses are from share of respondents selecting one of the options: shopped from a lower-priced retailer; shopped from a lower-priced brand; bought private label; bought a brand for which you had a coupon; used buy now, pay later; delayed a purchase; bought a larger size pack for lower price; bought smaller size or quantity; made more shopping trips in search of a discount.
Source: McKinsey ConsumerWise EU-5 sentiment data (France, n = 1,016; Germany, n = 1,016; Italy, n = 1,006; Spain, n = 1,006; and UK, n = 1,026), Nov 2024 (n = 5,057)
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To read the article, see “An update on European consumer sentiment: As pessimism grows, what happens to holiday spending?,” December 12, 2024.