The Germans keep their money together with rising inflation and want to save a lot in the coming months. This is shown by the so-called “Future Consumer Index” of the consulting company EY, which is exclusively available to WELT. The survey, in which 1000 German citizens took part, shows that less expenditure is planned for clothing and consumer electronics in particular, as well as for the use of delivery services and memberships in fitness studios.
“Consumers are adapting their purchasing behavior to the crisis and inflation,” says Klaus Ballas, Head of Consumer Goods and Retail at EY Germany. “The corona pandemic is becoming an endemic. And right now, when people want to breathe a sigh of relief, the next crisis is coming that affects us all.”
Inflation is hitting consumers with full force. And the end of the road has not yet been reached. “It affects all purchasing decisions – from everyday products to luxury goods.”
A good half of the Germans surveyed are planning some significant restrictions on consumption. And in an international comparison, that’s even less. In Spain, France and Italy, for example, but also in Japan, Australia and the USA, around two thirds of the survey participants announced that they would rather put money aside than spend it.
The proportion is even higher in China and South Africa at over 70 percent and Thailand even reaches 85 percent. “Not only in Germany the motto is apparently save, save and save again,” describes Ballas.
It will therefore be all the more difficult for companies in the coming months to sell products that customers do not consider absolutely necessary. “Consumers are more likely to think twice about which purchases currently make sense for them. And they will compare prices and look for cheap offers even more than before.”
Especially since increasing budgets are reserved for other things, above all for electricity, gas, rent and groceries. According to the survey, for which almost 18,000 consumers in 24 countries were asked, a majority of consumers worldwide expect prices to continue to rise in the coming months in these areas.
And the answers are from February, just before the outbreak of the Ukraine war. Expert Ballas therefore assumes that the numbers would currently look even more violent.
“The situation has worsened significantly in many areas: inflation is rising even faster than expected, price increases are becoming a serious problem for more and more people because they eat up disposable income. But the great awakening will come for many when they get their heating bill. Things can get tight, especially with middle and low incomes,” Ballas fears.
Especially since, in his view, inflation will continue unabated. “Life is becoming even more expensive because the high energy costs are far from being fully priced into the goods we buy in the supermarket today. Such second and third-round effects will further dampen purchasing power and thus also pose a real threat to the economy.”
Ballas now expects that certain purchases will be eliminated in the future. “The ‘nice to have’ is going out of fashion,” the consultant is certain. “People are focused on simple needs, they don’t want to waste time and money on things they no longer value while inflation continues to rise,” the study said. Companies need to consider this when addressing customers.
This continues a development that began in the two Corona years. “Since the beginning of the pandemic, most people have spent less money,” the study authors state.
Well-established patterns of action have been abandoned and in many cases still not restored, be it when visiting pubs and bars, going to the cinema or working out in the gym, or even when traveling by air and cruises. Inflation should now continue to manifest this development. Ballas is already talking about a “lack of optimism” that can now become a problem.
“Even before the war in Ukraine, consumers around the world were not looking to the future with optimism: their working and private lives had changed, and inflation was doing the rest.” also the middle class, which perceives the rising prices most clearly.
“Everything on shares” is the daily stock exchange shot from the WELT business editorial team. Every morning from 7 a.m. with our financial journalists. For stock market experts and beginners. Subscribe to the podcast on Spotify, Apple Podcast, Amazon Music and Deezer. Or directly via RSS feed.
