PwC report: While they expect food prices to rise and affect their budgets, consumers want to spend more this year on travel and non-essentials

Nearly half (46 percent) of consumers worldwide believe food prices will continue to rise, according to the PwC Global Consumer Insights Pulse Survey 2023 in June. This is up from 42 percent in the previous survey in February.

Although consumers have cut back on non-essential spending since the start of the year due to higher food spending, they now expect to increase their spending in the coming period. More than a third (36 percent) of respondents say they will spend more on clothing and health and beauty products, compared to 28 percent and 27 percent in the last two surveys.

“Consumers are pessimistic about price growth over the next six months and anticipate further price increases, but, compared to previous surveys when they expressed their intention to save money, they now plan to allocate larger amounts to other expenses such as home renovation and travel. A similar trend is seen in Romania, where trade continues to be up by more than 5 percent in volume despite inflation still running at a high level of more than 10 percent, according to data published by INS in May. The pressure of inflation on the population’s income is increasingly difficult to bear. In this context, the Romanian government has set as a priority for the coming period the reduction of prices for certain basic food products by capping the commercial surcharge. It remains to be seen whether this measure will have the desired impact”, said Ruxandra Târlescu, Partner and Retail Leader at PwC Romania.

The number of consumers willing to spend more on home improvement purchases has increased globally by 7 percent. This expected increase is similar to that indicated for other categories such as consumer electronics, sports and fitness equipment, home entertainment and online activities.

Far more consumers, 44 percent (up from 30 percent in February), expect their spending on travel, both domestic and international, to increase.

Although the e-commerce landscape is in flux, amid increased competition and a decline in some discretionary purchases, fully half of those polled intend to boost their online spending over the next six months. That is a significant jump from 43 percent in our previous survey.

That increase dovetails with consumers’ decisions to do more business with retailers that offer efficient delivery services − a recurring sticking point with e-commerce − and to increase their use of click-and-collect options. However, 50 percent of respondents also expect to continue shopping in physical stores, thus confirming the advent of the “phygital” consumer.