What: Despite feeling optimistic about their personal circumstances, European consumers are reducing spending due to higher prices and stagnant wages, according to a July 2024 survey by Boston Consulting Group.

Why it is important: Understanding consumer sentiment and spending behaviour is crucial for businesses to adapt their strategies in product assortment, pricing, and promotions, especially in a challenging economic environment where consumers are prioritising essential purchases over non-essentials.

The survey highlights the complex sentiment among European consumers across Denmark, France, Germany, Sweden, and the UK. While individuals feel more positive about their personal situations compared to national and political issues, economic pressures such as inflation and stagnant wages have led to reduced spending on non-essential items.

• Consumer Sentiment: The survey reveals that 73% of respondents experienced higher prices for goods and services in the first half of 2024. This has resulted in a significant cutback on discretionary spending, with many opting for lower-priced brands or fewer purchases. Apparel, snacks, and alcohol saw notable declines in consumer spending.

• Sustainability Considerations: Although sustainability is a consideration for nearly 40% of consumers when shopping, only 19% are willing to pay more for green products. This indicates that while environmental awareness is growing, cost remains a primary factor influencing purchasing decisions.

• Shopping Preferences: The survey also found that while online research is common, consumers still prefer physical stores for regular purchases like groceries. Online shopping is favoured for larger or less frequent purchases due to perceived benefits like time savings and product availability.

European customers are optimistic yet cautious on spending