Almost two-thirds of consumers are concerned about the rising cost of living, up from just over a third in May, a periodically run consumer survey has revealed. 

That means that retailers need to work harder than ever to attract consumers who are willing to spend less, the latest addition of the EY Malta Future Consumer Index says.  

According to the survey, 61 per cent of respondents are tightening their belts, cutting back on unnecessary spending and focusing more on price and value when making purchases.   

36 per cent of the 491 survey participants said that paying for essential items is a challenge.  

This year’s subdued black Friday could be a preliminary indication of a consumer crunch.

SME Chamber CEO Abigail Mamo said last week that while Black Friday brought a sales boom for shops selling electronics and appliances, tighter budgets meant consumers were more reluctant to splash out.  

“If people previously had €20 to spend, now they have €15,” she said.  

“Christmas 2022 is likely to be a more sober affair in more ways than one, with customers cutting back on discretionary spending, gifts, and celebratory food and drink as they become more conscious about the cost-of-living increase over the next few months,”  EY said.  

The rising cost of living has been a major global issue this year as inflationary pressures brought by the economic consequences of the Covid pandemic and higher international gas prices due to the war in Ukraine are felt. 

Research by a project carried out jointly by the General Workers Union, Moviment Graffitti, Alleanza kontra l-Faqar and Rethink Advisory recently found that a person with no children needs an annual income of €14,864 to live a decent life.  The national minimum wage stands at €9,600. 

Environmental impact of purchases

The EY survey also found that 63 per cent of consumers now pay more attention to the environmental impact of their purchases. More than a quarter of respondents said they are more aligned to organisations that shared similar values.  

“The shopping items that don’t match the increasing value that consumers place on sustainability will fail to raise profits, compared to durable and high-quality options,” EY read.  

“As consumer priorities change, brands and retailers must also change their offerings so that that supply can match the demand,” it said.  

The seventh EY future consumer survey was conducted between August and October across a stratified random sample of 491 participants.

The survey was spearheaded by Gilbert Guillaumier.