Will value be the key to unlocking consumer trust?

Silvia Rindone

EY UK&I Strategy and Transactions Managing Partner

Strategic mind with a pragmatic spin. Intellectually curious. Mother of two. Passion for art, food and travel.

Ray MacSweeney

EY-Parthenon Partner, Consumer, Ernst & Young LLP

Strategist with 20 years of experience, focused on the consumer products and retail sector. Passionate about sustainability and providing pragmatic strategies that help deliver results.

8 minute read 9 Jun 2023

The cost-of-living crisis – coupled with price rises – has made consumer confidence all but disappear, but there are opportunities ahead. 

In brief
  • Consumer confidence remains low as the cost-of-living bites, with more than two-thirds fearing the worst is yet to come.
  • Affordability is now important across all income brackets — though the K-shaped consumer persists.
  • While less important than price, sustainability and a focus on health and wellness continue to drive demand, alongside a continued shift to private label.

Just over a year ago, the EY Future Consumer Index March 20221 showed that “a holiday, haircut and a day out” topped the wish list of UK consumers as their long-term confidence to spend following the COVID-19 pandemic had returned. But today, they are more likely to be trimming their spending and opting for overtime.

Their confidence and ability to spend has all but disappeared as price rises and the UK cost-of-living crisis has hit their pockets. Meanwhile, their ideals around sustainability have been hindered by their ability to afford a greener lifestyle, although expectations around sustainable consumption remain.

In this extremely price-sensitive environment, brands and retailers need to work harder than ever to understand the factors influencing the UK consumer. Retailers need to re-evaluate ranges and pricing to better meet the needs of the K-shaped consumer which first emerged in the EY Future Consumer Index July 20222– a term which marks two extremes in spending patterns between the cash-strapped and those willing to spend. With 38% of UK consumers being concerned with their finances, there is a mandate for retailers to simplify product portfolios to reduce the proliferation of choice and to make the shopping experience easier. Meanwhile, those targeting consumers’ green ambitions also need to rethink how to make their sustainability ideals a more affordable reality.

There are consumer demands that offer other opportunities for brands and retailers; enhancing wellness offers for the health-conscious consumer or the use of technology that further aids the consumer in their buying experience, for example.

The UK consumer is suffering more than any of its European counterparts

Real pay fell by 3% year on year between December 2022 and February 2023. At the same time, more than 60% of UK consumers have witnessed price rises across the board, with as many as 87% of consumers seeing price rises in fresh and packaged food, compared with 59% in June 2022, for example.

This is translating into a real impact on their finances as the cost-of-living intensifies, with 62% extremely concerned by the cost-of-living crisis in the UK (compared with 50% in the rest of Europe) and more than two-thirds (67%) fearing it will get worse over the next six months. As they try to budget, more than ever consumers plan to spend less on everything from luxury items to food. 

The affordability first mindset of consumers prioritising living within their means – previously most evident during the pandemic – has returned. This is at the expense of the more idealistic planet first mentality – where consumers are aware of the impact of their consumption habits – which has been increasingly adopted by UK consumers previously.

Affordability first rose 10% to 43% between October 2022 and April 2023 – the highest level ever recorded by the EY Future Consumer Index. Meanwhile, there is a parallel drop in the planet first mentality, almost halving from 24% to 13% over the same period.

Cost-of-living crisis


of consumers extremely concerned about rising cost-of-living.

Future outlook


of consumers expect life to be worse in the next 3 years.

Affordability concerns


of consumers concerned about cost of food and household items.

The affordability impact continues to be felt most strongly by low-income households

Affordability continues to be felt most keenly by low-income households with the share of those putting affordability first up from 42% in June 2022 to 54% in April 2023 compared with a rise from 24% to 39% for middle-income consumers. In the high-income bracket those putting affordability first has risen from 11% to 17% over the same period.

Although the number of high-income consumers putting affordability first has also risen, it’s to a much lesser degree. Their financial resilience remains and the K-shaped consumer continues to be apparent. High-income consumers are more likely to have confidence in future non-essential buying – with 39% planning on increasing their holidays spend over the next three to four months, compared with almost half that (22%) for the rest of the population, for example.

Only 10% of high earners feel their personal finances will worsen over the next six months, and 45% believe they will improve. By contrast low earners see the reverse, with 45% pessimistic of their future finances and only 14% confident of an improvement. 

The continued shift to private label

As consumers look to cut spending, they have continued their shift to private label goods – products sold under a retailer’s own brand, but made by a third party. This is now a sustained behavioural shift, with a third (33%) expecting to spend more in the future on private label products, up from 27% in June 2022. This compares with 21% in the rest of Europe.

In certain sectors the willingness to shift to private label is even more pronounced, with 80% of UK consumers willing to buy private label packaged food, for example, compared with only 50% of their European counterparts.

The move from a conscious to frugal consumer and the impact on their green ideals

One of the biggest consequences of this more price-sensitive landscape is the move from the conscious consumer we saw previously to a frugal customer who is looking at any tactic they can to save cash.

They are cutting back on trend-driven shopping, such as in fashion and beauty, where the inclination to buy or keep up with trends has fallen across the board. But it also comes at the expense of their sustainability ideals. The 62% of consumers we referenced earlier who are extremely concerned by rising living costs compares with only 39% that feel as strongly about climate change.

Once top of mind, the obstacle of price is hampering their ability to embrace sustainable products. Energy is a big focus, with more than a third (36%) citing affordable and clean energy as their top sustainability issue.

But when it comes to sustainable products, more than half (56%) of consumers say that they cost too much and 71% say price puts them off purchasing. Only 31% of respondents will pay more for sustainably produced goods.

That’s not to say their environmental ideals have disappeared completely. Their frugal behaviours are translating into green behaviours – just with affordability now the main motivator, rather than conscience. Half (50%) of consumers say that they mainly take environmental action when it will save them money with the same amount always trying to conserve energy, for example. 

Similarly, trends such as repair rather than replace continue to see growth, up from less than half (49%) in February 2022 to more than two-thirds (68%) in April 2023.

Consumers are health conscious as well as financially conscious

Although their green behaviours are being hampered by affordability, the health-conscious consumer remains, with the desire for products that are healthy and good for them second only to price when making purchase decisions for the future.

Mental and physical health are also both top of mind with two-thirds (66%) of consumers intending to put greater emphasis on their physical health over the next three years and more than half (55%) their mental health. This mindset is leading consumers to prioritise home cooking over takeaway, with 32% of UK consumers planning on cooking more at home, while 40% plan on ordering take out less over the next 3 months.

Technology is also playing an increasing role in supporting healthier choices. 18% of UK consumers have used an app that provided them with a meal plan, 34% an app to track their calorie intake and almost half (47%) an app to monitor their exercise.

Opportunities for retailers and brands to get smarter with the shopping experience

Although online shopping has continued to grow, it looks like digital online penetration has now reached its new normal and is no longer going through the accelerating growth curve we saw during COVID-19, with the share of shoppers ordering groceries online over the next six months falling 9% to 59% for non-grocery items, and by 5% to 37% for grocery purchases.

However, familiarity and acceptance of different types of technology online is growing amongst consumers, providing opportunities to more deeply engage consumers through experiences they love when they are shopping online.

Nearly half (45%) of consumers say they are comfortable when artificial intelligence (AI) is used to improve their shopping experience and a similar amount (43%) are comfortable using a chatbot for customer queries. Their level of confidence in tailored promotions or deals generated by AI is also higher with nearly two-thirds (62%) saying that they had complete or moderate trust.

Where trust is lacking, however, is in their willingness to share data – even when they are to benefit. Those not wanting to share data to get cheaper product recommendations has risen from 32% in February 2022 to 41% in April. The reluctance to share data for healthier product recommendations meanwhile rose from 40% to 52% over the same period.

What UK brand owners and retailers need to do next

Consumer behaviour is continuing to adapt to a changing cost of living. It's clear that priorities have already shifted, and consumers are uncertain about the financial outlook in the coming months. There are opportunities out there, but capturing them will require brands and retailers to act now:

  1. A mandate for simplification and innovation: In a world where evermore affordability-focussed consumers are increasingly switching to private label and using discounters, brands have to balance the opportunity to simplify and innovate their ranges with better targeting of the needs of the value focussed consumer and the affluent consumer at either end of the K-shape.
  2. Drive and grow private label: Consumers increasingly see private label as a good choice. Retailers need to sharpen private label offers and have an opportunity to grow this area, whilst also balancing investment in branded goods which can drive in-store footfall.
  3. Embrace health and wellness: The post-COVID-19 consumer is increasingly focussed on health and wellness. Increasing investment and targeting innovation in this space will improve exposure to growth drivers.
  4. Frugality meets sustainability: Consumers are willing to spend on sustainable products and services where they believe it also saves them money. Translating “good for the planet” into “good for the pocket” by making sustainable goods more cost-effective will be critical to winning future growth.
  5. The next digital wave: Winning the trust of shoppers to access and leverage their data for next generation digital services will be the key to frictionless AI-led experiences that consumers are already starting to explore.
  • Methodology

    The EY Future Consumer Index tracks changing consumer sentiment and behaviors across time horizons and global markets, identifying the new consumer segments that are emerging. The Index provides regular longitudinal indicators and a unique perspective on which changes are temporary reactions to a current disruption and which point to more fundamental shifts. The 12th edition of the EY Future Consumer Index surveyed 1,000 respondents from the UK and a further 20,000 respondents across the US, Canada, Mexico, Brazil, Argentina, Chile, Germany, France, Italy, Spain, Denmark, Finland, Sweden, Norway, Australia, New Zealand, Japan, China, India, Indonesia, Thailand, Saudi Arabia, South Africa, Vietnam, Nigeria and the Netherlands between 16 March to 14 April 2023.

  • Appendix

    1. “Future Consumer Index: four ways to make the most of consumers’ post-lockdown spending,” ey.com, https://www.ey.com/en_uk/consumer-products-retail/four-ways-to-make-the-most-of-consumers-post-lockdown-spending, accessed 23 May 2023.
    2. “Future Consumer Index: How to embrace the rise of the K-shaped consumer,” ey.com, https://www.ey.com/en_uk/consumer-products-retail/future-consumer-index-embracing-the-rise-of-the-k-shaped-consumer, accessed 23 May 2023.


As UK consumers are the hardest hit by the cost-of-living crisis in Europe, the affordability first mindset has returned particularly for those with low and middle incomes. With spending cuts on consumers’ minds, retailers and brands will need to continue to meet customer demand for private label, sustainability and health and wellness – but at an affordable price point.

About this article

Silvia Rindone

EY UK&I Strategy and Transactions Managing Partner

Strategic mind with a pragmatic spin. Intellectually curious. Mother of two. Passion for art, food and travel.

Ray MacSweeney

EY-Parthenon Partner, Consumer, Ernst & Young LLP

Strategist with 20 years of experience, focused on the consumer products and retail sector. Passionate about sustainability and providing pragmatic strategies that help deliver results.