Danish Consumer Sentiment Series - December 2022: Update to Assess Impact of Inflation and Energy Crisis
High inflation, rising interest rates, and uncertainty about the future have led to decreasing consumer confidence in Denmark. BCG’s latest issue of the Consumer Sentiment Series from October 2022 found that 68% of consumers plan to spend less, 70% expect prices to increase, and only 12% expect to be able to increase savings in the coming six months. While a negative trend was already identified in our April 2022 consumer sentiment survey, the rapid development presents cause for concern for the Danish economy and the retail sector. With decreasing disposable income, consumers expect to reduce spending across all discretionary categories, including those that boomed before and after COVID-19 such as DIY and electronics.
Our data also revealed a change in consumer preferences, with health being replaced by value for money and quality as key criteria in the purchasing process. As saving becomes an imperative, ~85% of consumers in Denmark are expected to seek cheaper alternatives to traditional grocery retailers, in response to an increasing cost of living. Furthermore, a larger appetite for second-hand products has been identified. By comparing today’s consumer mood with the outcome of our surveys in March 2021 and April 2022, this study aims to provide companies with an outlook over the next six months, highlighting opportunities and challenges deriving from the current economic uncertainty.