Havas: higher income families being squeezed by cost-of-living crisis
The cost-of-living crisis has started to impact high-income households since April, new data from Havas Media Group has found.
In the second wave of Havas Media Group UK’s insight team’s Cost-of-Living study, an increase of 10 percentage points of high-income households, those with £40,000 or more per year, reported they are feeling “less comfortable financially” compared to the first wave of research in February/March.
While low and middle-income families continue to report “mounting financial pressures”, more high-income households said they were struggling with grocery bills (up 12 percentage points), rent or mortgages (up 9 percentage points) and energy bills (up 11 percentage points).
An increase of 13 percentage points of these households said they wanted to cut down on expenses, mostly through fuel (up 8 percentage points) and grocery purchases (up 11 percentage points).
The likelihood of consumers to switch products also went up, most notably in food & drink (up 5 percentage points), but high-income households were also likely to switch products in computer and video games (up 10 percentage points), electrical products (up 6 percentage points) and homeware and furniture (up 8 percentage points).
More than a third of respondents saw the UK economy as a top concern (36%) and nearly three-quarters of respondents (73%) have noticed “big increases” in the costs of goods and services since the first wave of research.
Groceries, eating out and petrol or fuel were where the biggest price increases were felt. For groceries this went from 47% to 63%, dining out went from 23 to 34% and petrol went from 67% to 82% experiencing a price rise.
Previously the first wave found that consumers increasingly expected brands to show “tangible and meaningful” solutions to the cost-of-living crisis.
Havas’ latest study found consumer expectations for brands across functional, personal and collective benefits, namely the product or service a brand delivers and how they improve people’s lives and society, have “hardened” across all three pillars. More Brits expect brands to be “transparent and honest” in activities and communications (up 4 percentage points).
Helping consumers save money and offering fair pricing were also higher up the priorities for personal and functional benefits consumers expect from brands (up 2 and 1 percentage points respectively).
Tony Mattson, head of strategy at Havas Media Group UK, said the cost-of-living situation is “very likely to get worse” and said now was “truly the time for marketing to come to the fore”.
“Contextual understanding will be critical, so that companies and their agencies can adapt to people’s changing needs, motivations, and triggers. That means clients and their agency partners being empathetic to the needs of the business, responsive to the dynamics of the category and innovative in shaping customer value. Resilience and adaptability will be critical for success,” he added.