European Shoppers Cut Spending Despite Easing Inflation, BCG Survey Finds

A survey conducted by the Boston Consulting Group (BCG) reveals that European consumers are scaling back their spending, even as inflationary pressures have started to ease. Based on responses from over 7,000 participants across Denmark, France, Germany, Sweden, and the UK, the findings highlight how 73% of consumers experienced higher prices for goods and services in the first half of 2024. However, with wages and savings failing to keep pace, 25% of respondents reported income reductions, and 28% saved less during this period.

As a result, consumers are cutting nonessential spending, with categories like apparel (-20%), snacks (-15%), and alcohol (-15%) experiencing the most significant declines. Luxury fashion, however, saw more resilience, attributed to two distinct consumer segments: one group reducing spending by 35%, while a second, higher-income group increased purchases by 22%, focusing on premium products.

Despite financial pressures, consumers reported more concern about national issues—such as the economy and political instability—than about their personal situations. While only 25% expressed pessimism about their financial security, 57% worried about their country’s political situation, and 49% were concerned about the economy. Regional differences were notable, with Nordic consumers showing greater optimism, while French respondents were the most dissatisfied with national matters.

Sustainability emerged as a relevant but secondary concern, with 40% considering environmental factors when shopping. However, only 19% of respondents indicated a willingness to pay more for sustainable products, prioritizing value, practicality, and convenience over environmental concerns.

Though online browsing has become integral to the shopping process, physical stores remain the favored choice for European consumers. Shoppers in France and Germany, in particular, continue to prefer in-person purchases for groceries, beverages, and household items.

BCG’s Andreas Malby emphasized the importance of localized strategies and dynamic pricing to attract price-sensitive consumers. Retailers must move beyond simple discounts and develop a deeper understanding of customer behaviors to remain competitive in the current economic climate.