As prices rise, so does global consumer concern for inflation. And while this is not immediately shocking, findings from Deloitte’s Global State of the Consumer Tracker suggest “flashing warning signals” from consumers.
“While consumers might be more accepting of higher prices when they’re driven by pandemics and wars, their patience around corporate greed looks to be thin,” said the authors of Deloitte’s report.
Despite consumer demand generally remaining stable, according to Deloitte’s global survey data, an estimated 75 percent of consumers are now concerned about rising prices for everyday purchases. With this in mind, the authors of the report advised consumer businesses to expect consumers to be “alert and responsive to price changes and remain cautious about the price elasticity available in the market.”
As companies continue to raise prices to protect margins, consumer survey respondents reported they believe companies are “being predatory — using this moment of historic inflation to raise prices beyond their own rising operating costs.” And as trust dissipates, researchers from Deloitte say it’s “likely to come at a cost” with survey responses indicating consumers who believe companies are price-taking have weaker spending intentions compared to those who do not.
Globally, Deloitte’s survey saw 54 percent of consumers think that companies are at fault for rising costs, feeling they are rising prices beyond what is necessary to make up for rising operating costs in an attempt to increase profit.
“There’s a clear lack of trust brewing,” said the authors of the report. “Whether or not businesses are price-taking is irrelevant. What matters is that people believe it’s happening.”
Looking at spending cuts, Deloitte’s data found consumers will look to more discretionary categories including recreation and entertainment, leisure travel, restaurants and some less discretionary categories including clothing and personal care. These categories, Deloitte said, may represent where demand will struggle amid inflation pressures.
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