4 in 5 consumers believe companies are taking advantage of inflation to increase prices
The results of a new Euroconsumers survey point towards some significant, yet concerning trends in inflation’s impacts on consumers in Belgium, Spain, Italy and Portugal. Due to the squeeze felt in 2022, consumers say they had to make substantial changes to their habits when spending on food, energy and other essentials. The findings also indicate that trust in suppliers and authorities is being eroded as a consequence. Four in five consumers believe companies are taking advantage of the cost of living crisis for profit. The new survey, on the current financial situation of consumers and its impact on their behaviour, was conducted in December 2022 in our four European member countries and compared the impacts of inflation against an earlier survey in April.
Inflation weighed increasingly heavy in 2022
In December, over half of respondents (55%) from all four countries surveyed considered their financial situation to be worse than a year before. This is a marked increase from April, when the response to the same question in an earlier survey was 39%. In April, 28% of respondents stated that their financial situation was difficult or very difficult. This rose to 35% of respondents in December.
Financial back-up plan?
Unsurprisingly, this had a huge impact on savings. 30% of respondents stated that they had failed to save at all during the year and 41% indicated not to have any margin left to cope with future price increases (versus 35% in April). In December, 35% of those surveyed responded that they had to use accumulated savings at some point over the past 12 months. Also, 32% of respondents either borrowed money from family, friends or other acquaintances or considered doing so and 31% either took a loan from a bank or considered doing so.
Spending down on food
The soaring prices pushed consumers towards changed behaviour in order to cope. In regards to groceries, 86% of respondents changed shopping habits in 2022 due to rising prices. This not only covers buying lower price brands (61%) or buying more products on promotion (67%). Alarmingly, almost a quarter of all respondents (24%) are also buying less food in general.
Heating switched off
Almost all respondents (93%) took action to cut energy expenses, including even switching off the heating at home more often (58%) or keeping it lower (56%). Consumers are using household appliances more at cheaper times, as well as taking shorter showers and fewer baths. Judging by our findings, when the perception of price increases on energy bills are higher, the number of behaviours adopted increase as well.
A long year ahead
These changes to consumers' habits are taking their toll on many. In December's survey, 61% of respondents stated that changing their behaviour had had a moderate to big negative impact on their overall quality of life. In regards to mental-wellbeing, over half (54%) claimed that they felt a moderate to sizable negative impact.
The right price?
Inflation and price rises are also having a knock-on effect on consumer trust in firms and governance. A whopping 80% of respondents believed that companies are taking advantage of inflation to increase business profits. At the same time just over half of those surveyed indicated not to trust authorities (national and EU) to efficiently control and avoid “unjustified price increases”.
“Given the massive toll that price increases are having on consumers’ lives and the overall economy, these findings call for policymakers and authorities to have a close look at different price settings, check whether higher costs are indeed justified and take action if needed.”
Els Bruggeman, Head of Policy and Enforcement at Euroconsumers
Boost for green energy shift
If there is a silver lining coming from this cost of living crisis, then it is consumers’ engaged behaviour towards the much needed energy transition: 73% of respondents expressed they plan to continue adopting energy saving behaviours even when prices would go down. Likewise they said increasing energy costs made them more aware of energy saving habits (70%) and energy saving equipment (59%). In 2022, some consumers took concrete action to insulate (9%), install solar panels (5%) or opt for energy-efficient appliances (11%). But many more have future plans to that regard: 27% of respondents across the four countries said they were planning to improve home insulation, 26% intend to install solar panels and 28% indicate they will switch to energy-efficient household appliances like fridges, ovens, washing machines or dishwashers.
“Euroconsumers and its national organisations are on hand to help consumers . Since the beginning of this crisis, we have empowered consumers to save money with easy access to price comparison tools and hands-on support to increase energy efficiency and independence, and we will continue to do so. We also aim to secure an increased dynamic between the supply and demand side that should lead to an improved, more resilient energy market.”
Marco Pierani, Director Public Affairs & Media Relations at Euroconsumers
Note on methodology
The sample was reached through an online questionnaire sent out to a representative sample covering Belgium, Italy, Spain and Portugal, based on the latest national statistics of each country. The socio-demographic variables taken into account were: gender, age (25-74 years) and regional distribution. After receiving the results, the data were weighted for gender, age, region and educational attainment. The data collection took place from 16th to 21st December 2022. The total number of valid answers used for analysis is 5268. A similar survey was previously carried out between 26th and 29th April 2022. Unless specified otherwise, all figures in the text above relate to the December survey.