A measure of… hope?

Following a tricky two years of lockdowns and covid regulations, 2022 was supposed to be a time of growth and stability for brands and retailers. Instead, we faced a new sort of instability; the cost-of-living crisis. Given all of this, it would be easy for pessimism to be the dominant feeling as we head into 2023. However, the answer isn’t quite so simple. Consumer sentiment is on down but not out. As Market Measures continue their ongoing proprietary work, looking at the impact and implications of the cost-of-living crisis, we’ve taken a look back at what has changed over the past three years and what this signals for 2023.

Since the onset of Covid restrictions, we have been tracking how people have been feeling – asking around 800 people each month to describe how they feel in three words.

We have, thankfully, not returned to the lows of the pandemic but there has been a steady drop in positive sentiment across 2022. Even the small uptick experienced in August was quashed following the Truss/Kwarteng mini-budget and, despite the energy relief scheme which had a swift and positive impact on people’s ability to meet their household bills, there is still a great deal of uncertainty.

And we are feeling this uncertainty in our wallets – 83% of people in December said they had less disposable income a climb from 71% in January of the same year.

However, when asked our panel what word described their feelings towards 2023 the three most prolific were “hope”, “excited” and “worry”. So a layer of stoicism and anticipation pervades. Perhaps we simply do not want to consider things getting worse but there do appear to be signs of positivity.

And with the Bank of England expecting inflation to fall sharply in 2023 – foreshadowed by a small drop in December – there is a slim glimmer of a brighter year ahead.

So as a brand where does that leave you? These are three of Market Measures key takeaways from our The Measure of 2022 report:

• Brand loyalty has never been harder to hold onto. Our shift to discounters and own-label products demonstrates how easily shoppers can alter their habits. Ensuring a brand’s proposition and positioning meets customers’ needs is vital.
• The pandemic online supremacy is over but the high street has a battle ahead. The high street fared well over Christmas but it is unlikely that this flurry of spending will linger so making sure your channel mix offers convenience is key. When the postal strikes stripped away convenience shoppers voted with their feet and returned to stores.
• There is a balance of priorities and sustainability is losing out. Despite a push into more circular economies in areas like fashion, sustainability will continue to suffer as people are forced to prioritise price over personal values. Second-hand clothes are often a cheaper alternative making both environmental and economic sense. In FMCG people do not believe they should have to pay more for sustainability – it should be a hygiene factor.