Two-thirds of consumers are significantly discouraged from buying sustainable goods and products due to high prices and the rising cost of living, according to the latest EY Future Consumer Index.
However, the 10th edition of the global research of 18,000 consumers, conducted between May and June, finds consumer sentiment toward sustainability has improved compared to the previous year’s report.
Fewer consumers (58 per cent) associate sustainable products with low quality compared with last year (67 per cent). The same is true for poor durability which is down from 58 per cent to 50 per cent.
In addition, more consumers trust the information about sustainable products from the companies that make them, with lack of trust down from 59 per cent to 51 per cent.
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Consumers are seeking new methods of “conscious consumption” with 87 per cent of respondents trying not to waste food, while 36 per cent will buy more second-hand products, up from 30 per cent in February.
Driven by the current demand for affordability, consumers are substituting non-essential spending categories and looking for alternatives, making what they have more sustainable.
Almost two-thirds of respondents state they no longer feel the need to keep up with seasonal fashion trends, and more (69 per cent) are attempting to repair their belongings rather than replace them.
Separately, 79 per cent of consumers say their finances are a concern, with 62 per cent expecting living costs to increase even further over the next six months.
Shrinking confidence
These concerns over personal finances are affecting the majority of all income levels, from low-income (87 per cent), middle-class (77 per cent) to high-income (64 per cent).
With consumer confidence shrinking, the research reveals a significantly pessimistic economic outlook from the western markets when compared to emerging/other markets.
Many consumers from the US (54 per cent), UK (65 per cent), Germany (84 per cent) and France (85 per cent) state they believe life will remain the same or worse over the next three years.
Those figures are higher than Brazil (21 per cent), India (24 per cent), Saudi Arabia (37 per cent) and China (38 per cent).
EY Ireland consulting partner Ivan O’Brien said there was “a perfect storm brewing” due to rising interest rates, lower savings, increasing energy costs and the return of lockdowns in China that complicate global supply chains.
“Irish Inflation has risen to levels not seen since the 1980s and, as prices continue to rise, there is increased pressure placed upon household budgets throughout the country,” he said.
“Customer buying behaviours are changing once more and supply chain theory has become the topic of dinner conversation around the country, with Irish businesses taking note.
“Digital behaviours learned during lockdown will continue to be embraced if they offer savings to Irish consumers, and businesses with user-friendly digital channels have an opportunity to capitalise on this.”
Additionally, he said, producers are moving away from lean production processes and embracing “just in case” planning, so as to avoid running out of stock due to sudden increases in demand.
“Irish consumers are responding by becoming more prudent in their weekly grocery shop, holding on to clothes a little longer and reducing their spend on hospitality,” he said.
“Our urge to embrace sustainable products is also challenged, as inflation forces push consumers to reprioritise how they spend. It is very likely that some new frugal lifestyle habits will stick.”
