Many people in Malta are travelling less and reducing their spending on entertainment and fashion as the cost of living rises, a survey held over the past few weeks shows.

Just under a third of consumers who took part in an EY survey earlier this month said they have stopped travelling for holidays while a further 22 per cent said they are travelling less.  

Published on Thursday, the EY Malta 6th Future Consumer Index found that people are “fundamentally rethinking” how they live their lives.

The change in mentality is mostly driven by the rise in the cost of living - overall, 35% of consumers surveyed said the rising cost of goods and services is making it harder for them to afford things. 

Entertainment-related goods have also stopped being a priority for 21% of those surveyed who said they have stopped purchasing such items.

Similarly, 18% have had to cut down on beauty products and cosmetics while 16% have stopped buying clothing and other fashion-related goods.

“At a time of rising inflation and global turmoil, people are fundamentally rethinking how they live their lives and asking themselves what relationship they really want with consumerism and its values,” EY associate partner Gilbert Guillaumier said in the report.

People are making the most changes in how they purchase non-essentials, such as clothing and entertainment

The index also revealed that it is no longer just low-income consumers who are worried about rising prices, with the middle classes actually being “most aware” of such increases. Inflation, EY found, is causing consumers at all income levels to change their shopping behaviours and purchase decisions. 

“People are making the most changes in how they purchase non-essentials, such as clothing and entertainment, to be able to afford gas and fresh food, where there are fewer alternatives.  

“With their spending power eroding, consumers are planning to rein-in their consumption, trade down to cheaper alternatives, and purchase fewer non-essentials. The categories most affected are holiday travel and entertainment; beauty and cosmetics; and clothing and shoes.” 

Older consumers are more likely to be burdened by financial struggles, the index found, echoing similar concerns flagged recently by Caritas that the elderly were hit hardest by the increase in prices. 

According to EY, 37% of retired consumers said they expect to be worse off financially in the next 12 months compared to 17% of people aged between 18 and 40.  

The difference in generational consumer behaviour emerges strongly not only with respect to financial outlook, but also in the way people interact with, and use e-commerce platforms locally, EY found.  

Change in product purchases as a result of price increases. Photo: EY

Higher value given to experiences 

Despite travel taking a backseat for a sizeable portion of respondents, 39% of younger respondents surveyed said they will spend more on holidays in 2022 as 45% of consumers planned to “live more in the moment and not plan for the long term”.  

“The modest post-pandemic lifestyle that many consumers plan to live is one that puts a higher value on experiences, with 42% saying they plan to spend more in this category. In line with the growing desire for simple flexibility, the most appealing experiences will be those that are easy to access and take minimal time investment.  

“That means more digital experiences and quick, last-minute getaways,” Guillaumier said. 

 The 6th EY Future Consumer Survey Malta was carried out across a stratified random sample of 835 participants. The survey is conducted periodically to capture changes in consumption and consumer behaviour.