A large majority of Americans are buying fewer products overall, and a sizeable number of consumers have switched to private label brands to save money.
That's according to EY’s latest Future Consumer Index (FCI) study which found that affordability of products and high costs are still top of mind of American shoppers. More than eight-in-10 U.S. consumers (81%) are planning to buy fewer items across all categories to save money, with 46% noting they're only purchasing essentials at this time.
A majority (62%) of consumers are “extremely concerned” about the rising cost of living. Half (50%) of consumers expect to spend about the same on the next big shopping sale versus previous years, while 39% of consumers expect to spend less this holiday season.
"Cost-strained consumers want to know they are getting a deal, or they simply won't prioritize a purchase," said Kathy Gramling, EY Americas consumer industry markets leader. "Traditionally, brands and retailers have turned to big moments like Black Friday and Cyber Monday to drive holiday demand, but we've seen that many consumers are trying to manage their budgets and have been preparing and shopping sales all year round."
One key way for consumers to save money is by purchasing less-expensive private label products. More than two-thirds (67%) of consumers agree that private labels are helping them save money. A similar number (69%) note that private labels satisfy their needs just as well as brands, and 57% claim that private labels are increasingly better-quality products.
Given higher prices, brand loyalty has taken a hit as consumers look to save. Sixty-four percent of consumers in the survey said they are willing to purchase private label packaged food and 63% are willing to purchase fresh food from private brands.
Other methods of saving money include cooking more at home (52%) and spending more time at home in general (45%). Additionally, 48% of consumers are expecting to spend less on vacations over the next three to four months, and 48% plan to spend less on recreational activities.
"These shopping habits support the need for a connected retail ecosystem and data-driven insights," said Isaac Krakovsky, EY Americas retail leader. "There is a huge opportunity for retailers to leverage new technology to enhance their consumers' shopping experience both in-store and online. Through AI, retailers can better anticipate customer needs, and orchestrate the right conversations to create personalized assortments, experiences and offers."