Consumer Confidence Cracked by War and Inflation

The ukrainian warthe spiral of inflation and and the energy crisis are leading to one consumer confidence crisis. These three elements are the center of the concerns of the Spanish, while the covid has already lost positions. The international context is already affecting the consumption habits and postponing certain purchasing and spending decisions. It is one of the conclusions of the consultant kantar that also detects the “desire to recover the time lost due to the pandemic” of consumers in a framework of growing spirit of cost containment.

72% of consumers see poor economic prospects for Spain and, at the same time, 74% are positive about life – the most in Europe -, according to the ‘Global Issues Barometer’ report by Kantar Insights released this Tuesday . “The main expectations for the Spaniards, beyond the end of the war, are in the ‘Carpe Diem’ (seize the day), that is, go on vacation and return to celebrate life events (weddings and other celebrations), aspects postponed by the pandemic”, concludes the report based on a large-scale survey conducted in 18 countries around the world representing 57% of global GDP. The study, on a sample of more than 10,000 people through an open survey, was carried out on April 9 and 10 and is based on responses expressed verbally and subsequently analyzed using techniques based on artificial intelligence.

Stop the most important expenses

According to Martin Wohlfart, director of the study in Spain, “if we started the last decade with an economic crisis, we are doing it with three at the same time. Coming out of the pandemic, into inflation and the war hovering around. This leaves us with a consumer Spaniard at a very conjunctural moment, which he is going to spend on vacations and with pending events and celebrations that he really wants to celebrate”. But he acknowledges that the evolution of consumption in the coming months “will depend on that evolution of the war and the cost of raw materials. Spending on vacations or leisure is not going to stop, but if we will think five times when making most important expenses.

Kantar considers that Spanish households are containing the household budget but at the same time they face bills or basic products such as food without problems, 69% for the former, 85% for the latter. On the other hand, relevant expenses that involve a medium or long term are seen with caution or, directly, impossible to face. 55% affirm that they could not assume the purchase of a vehicle and 31%, although they could, do not want to risk it.

87% of Spaniards are concerned about the war in Ukraine, which places us as the country with the greatest concern, only surpassed by Poland (96%), which borders the conflict zone. Beyond the war, Spaniards show a wide range of concerns, with the economy and education (49% each) and health (45%) being the most cited, even above the pandemic, which, at the moment, is of concern to 38%, with Spain being one of the countries with the highest vaccination rate among the population. However, when it comes to problems to be solved, Spaniards ask for more action and resolution on social issues (30%), followed by the economy (23%) and the climate and environment (20%). Therefore, the Spaniards show certain differences between what worries them and what urgently needs to be corrected.

68% of consumers acknowledge that prices are rising very sharply, a greater hypersensitivity than in other European economies such as Germany, where 59% have the same feeling with the increase in the cost of living; or France and the United Kingdom, with 49% and 48%, respectively.

Four out of ten Spaniards recognize that they will make changes in their domestic economy to reduce expenses, while a third will modify behaviors that imply a respite for the wallet, such as driving the car fewer kilometers and saving on spending at gas stations. One in four will put limits on that money that month after month they were putting in the piggy bank and saving, which has been one of the most recurrent behaviors during the pandemic. The savings rate in 2020, in fact, was a record and reached 15% of disposable income, according to the INE. This can directly affect certain life plans. In fact, 40% already feel that inflation affects them in some of their vital projects. Thus, the increase in the cost of living affects 17% in moving and changes of home, and 14% in pension plans.

Related news

Although the war in Ukraine worries almost 9 out of 10 Spaniards, only 14% ask governments and global organizations to do something. And the same happens with the pandemic, since it worries 38%, but only 7% demand that society and those responsible for it find a solution. Even inflation is perceived from that rational distance. The economy worries 49%, but only 23% is the percentage of the population that asks for facts and actions to solve it. Wohlfart comments: “All this leaves a halo of eventuality in the Spaniards regarding crises, since they are getting used to them, so that, although it strikes a chord with them, they think that the waters will return to their natural course and that everything will work out.”

Climate change

Another of the report’s conclusions is that climate change is still not perceived as an immediate emergency, as is the case with war, the economy or the pandemic. Thus, 20% of Spaniards mention environmental problems as one of the great concerns. This data places us far from neighboring countries, such as France or Germany, where around a third of the population is very sensitive about this issue. 47% state that they have stopped buying certain products or services due to their environmental or social impact. And a similar percentage says they look for companies and brands that offset their impact with sustainable actions (planting trees or similar initiatives). Basically, Spaniards are subordinating sustainability to their pockets, so that two out of three consumers say they want to buy sustainable products, but brands must make them more affordable for their economies.

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