As the country slips into recession, people in the UK are currently experiencing the worst cost of living crisis for decades. Inflation, according to the Consumer Prices Index, is currently at around 10%. According to Oxford Economics, the UK likely entered recession in Q3 2022 and total GDP growth for 2023 is likely to be negative (around -0.9%). For many households, this level of price inflation puts huge pressure on budgets. For others, with inflation concentrated in energy and food costs, it is simply unsustainable. Businesses across the country are in survival mode with one recent report suggesting the number of firms in financial distress has grown by 36% over the past year.
New Report: The Post Recession Consumer:
Shaping behaviour now and in the future
This is a big event. Politicians are spending to cap energy costs for both households and businesses, spending bigger sums than even the furlough scheme during the pandemic. Just like the pandemic, the duration of this event is unknown. And also just like the pandemic, the impact of this crisis will live for a long time in people’s minds, shaping opinions and behaviours in the years ahead.
Right now, we understand that many businesses will understandably be thinking about the shorter term – responding to immediate challenges both in the supply chain and reacting to changes in consumer demand, perhaps thinking of how long they will need to take cover and weather the storm.
Looking further ahead, understanding the longer-term movement of trends throughout this period will allow businesses to take the actions they need to take either to survive or to meet new challenges presented by the immediate crisis. Trajectory stands ready to assist with this, providing insights around short term trends and changes in consumer behaviour. As part of our regular sentiment tracker we have commissioned comprehensive cost-of-living and recessionary-behaviours research to monitor such shifts.
A trends framework to understand change
Download the report:
In both 2009’s the Post-Recession Consumer, and 2020’s the Post-Pandemic Consumer, we categorised consumer trends as follows:
- Mature consumer trends (those that existed well before the crisis, but that would be influenced by it) and newer consumer trends (those that were emerging around the time the crisis struck)
- Those trends that were accelerated by the experience of the crisis and those that were slowed by it
Here, we have repeated this exercise with today’s consumer trends in mind.
The chart summarises our expectations of how the experience of the next few months will affect these trends and behaviours long after the inflation crisis is over.
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