Consumers across Canada are preparing to hunker down for a long financial squeeze, with more than half of households expecting their living costs to continue trekking upwards, according to the latest EY Future Consumer Index Survey.
The survey found that personal finances are affecting all income levels, from low income (87 per cent) to middle class (77 per cent) and even high income (64 per cent.)
"Stunted by inflation, consumers are turning back to pandemic-induced behaviours – prioritizing savings over spend," said Monica Chadha, EY Canada Retail Leader. "This trend towards limiting non-essential spending and looking for more sustainable alternatives presents a challenge to fast fashion retailers."
Some people are cutting back again
As the cost of living rises, some consumers are taking matters into their own hands by repairing their belongings rather than replacing them (69 per cent), buying second-hand products (25 per cent) and cutting back on the amount of food they waste or throw away (85 per cent).
A small but a growing number of Canadians are interested in exploring emerging digital and technology experiences. Nearly one in 10 respondents have used digital currencies, experienced the metaverse or purchased a virtual product, largely driven by younger and more affluent consumers.
"Newer forms of digital goods and services present opportunities for companies to invest in developing channels to differentiate their brand experience, innovate and capture more consumer data," said Elliot Morris, EY Canada Grocery and Consumer Packaged Goods Leader. "But it's important to keep in mind that as the digital world expands, consumers will become increasingly cautious when sharing their personal information.