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Kearney Consumer Institute's Latest Stress Index Findings

The Kearney Consumer Institute (KCI), a think tank that operates under Kearney, a renowned global management consultancy, has released its latest Consumer Stress Index. This marks the fifth quarterly installment and also includes a comparison to the previous year's data, offering insights into consumer sentiment and spending behavior. The Index is crucial in understanding how various macroeconomic factors influence personal finance and purchasing decisions among consumers.

Key Findings from the Consumer Stress Index

One of the most intriguing revelations from the Index is the dual reality faced by consumers in 2024: while many people express concerns about their financial stability, they continue to spend money, particularly in sectors like travel and entertainment. KCI lead Katie Thomas emphasizes this disconnect, noting, "The gap between cash-strapped individuals and the reality of increased holiday spending illustrates a nuanced economic landscape."

The Index surveys approximately 24,000 consumers across 12 different countries and focuses on five main pillars: financial wellness, health and education, geopolitical issues, food and environmental concerns, and innovation plus technology.

Stress Vs. Spending: A Closer Look

A standout observation from the year-end Index data indicates that an individual's perception of the economy does not necessarily predict their spending behavior. In fact, personal circumstances, such as job security and wage fluctuations, are more reliable indicators of consumer spending. Nearly 75% of respondents reported that rising housing prices did not significantly affect their financial concerns regarding food affordability.

Additionally, consumers' long-held perceptions of what constitutes a 'fair' price are beginning to shift. Despite overall prices escalating by over 20% from 2019 to 2024, wages have kept pace, leading to similar percentages of income being allocated towards essential expenses as in the past. A slow acclimatization to what many now refer to as 'new-normal' pricing may be on the horizon.

New Indicators of Financial Health

Historically, grocery spending has been a go-to indicator for assessing consumer financial health. However, the latest findings suggest that new sectors are emerging as better indicators of economic well-being among consumers. The evolution of grocery shopping, characterized by increased brand and retailer options, allows consumers to manage their expenditures more effectively. They can optimize their everyday grocery purchases categorized as 'needs,' thus freeing up funds for 'wants' such as travel and leisure activities.

As consumers adopt strategic approaches to budgeting, this trend underscores a broader behavioral shift in spending priorities. Consumers appear increasingly willing to adjust their grocery habits to accommodate more leisure spending, reflecting a deeper understanding of personal finance management in a changing economic climate.

Conclusion

Overall, the Kearney Consumer Institute's findings highlight a complex and evolving relationship between consumer stress and spending habits. As economic conditions continue to fluctuate, understanding these dynamics will be essential for brands, retailers, and policymakers aiming to meet the needs and expectations of today's consumers. The full report is available for those looking to dive deeper into the trends shaping consumer behavior in 2024.

For further inquiries or to schedule a discussion with Katie Thomas, you can contact Meir Kahtan of Public Relations at +1 917-864-0800 or [email protected]

About Kearney

Founded nearly 100 years ago, Kearney is a premier global management consulting firm dedicated to helping organizations navigate complex business challenges, supported by teams of devoted experts.

About Kearney Consumer Institute

The Kearney Consumer Institute is dedicated to exploring modern business challenges through a consumer-centric lens, enhancing understanding of today's rapidly changing consumer landscape.