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05 August 2022
How the cost-of-living crisis is biting
Money & financePurchase behaviourUnited Kingdom
Almost everyone in Britain is being hit by increases in the cost of living, with millions cutting back on energy use in the home and on food and essentials.
In the latest ONS Opinions and Lifestyle Survey (data collected over the last 12 days of July), 89% of adults reported their cost of living has increased – that’s up from 62% in November last year.
Where people are being hit
The most common reasons reported by these adults for their increased cost of living were:
an increase in the price of their food shop (94%),
an increase in gas or electricity bills (82%),
an increase in the price of fuel (77%).
What people are doing
The most common lifestyle changes being made include (based on data collected from 30 March to 19 June):
spending less on non-essentials (57%, around 26 million people),
using less gas and electricity in their home (51%, around 24 million people),
cutting back on non-essential journeys in their vehicle (42%, around 19 million people),
more than a third have cut back spending on food and essentials (35%, around 16 million people),
almost a quarter (23%, around 11 million people) used savings to cover costs, and 13% (around 6 million people) said they were using more credit than usual.
What it means for brands
The figures lay bare the scale of the crisis that has been building for months. While there are differences in the responses of consumers depending on their income, age, whether they’re home-owners or renters, and what part of the country they live, it’s clear that very few people are not affected to some extent – and this is before yet another energy price hike scheduled for the autumn. Marketers need to be thinking about every aspect of their brand – price, value, creative, media – to weather the storm that’s about to hit. WARC’s Economic slowdown and inflation hub offers some guidance.