The war in Iran is having an increasingly tangible impact on consumer behavior in Europe. Through rising costs for energy, fertilizers and logistics, the conflict is having a direct impact on European households, according to an analysis by the market research institute “YouGov“. This is forcing consumers to shop more strategically. The analysis summarizes several studies and assessments.
Since the beginning of the cost of living crisis in 2022, consumer price caution has remained at a high level – about 40 percent of Europeans are already planning to adapt their behavior due to prices, BTA writes.
At the same time, the share of households in difficulty remains above pre-crisis levels, which forms a more cautious long-term consumption base.
“The current increase in spending is confronting a consumer environment that is already marked by prolonged inflation“. Consumers are responding not with sharp spending cuts, but with increasingly differentiated and selective management of their consumption.
The analysis also outlines a “two-speed market“: while some households feel temporary comfort, others – especially in countries such as Romania, Hungary and Spain – remain under strong financial pressure.
Unlike the inflationary shock in 2022, the current pressure comes simultaneously from three key sources – energy, fertilizers and logistics.
This “triple whack“ directly affects the production and supply of food and consumer goods, leading to increases along the entire chain – from raw materials to the shelf.
The most affected are energy-intensive categories such as dairy products, frozen foods and beverages, where the costs of refrigeration, transport and packaging react the fastest to price increases.
Despite the pressure, consumers do not move to sharply limit their spending. Instead, they rearrange their consumption selectively – according to which categories they perceive as “justifiably expensive“ and which ones they can replace.
This logic leads to three clearly expressed behaviors: protection of basic categories (bread, dairy products, staple foods), optimization in goods such as meat, alcohol and household products and rapid rejection of “superfluous“ categories such as cosmetics, treats and minor purchases.
Expectations of future restrictions play a key role. More and more Europeans believe that they will have to reduce their spending - especially those who have already done so. This is becoming an independent factor for restrained consumption: even without an immediate drop in income, uncertainty leads to higher price sensitivity.
At the same time, the share of households that are experiencing difficulties in covering basic expenses - especially for energy, fuel and food - is growing, including in large economies such as Germany and the UK.
The data also shows specific adaptation mechanisms. For example, consumers are buying smaller quantities, but more frequently. They are also actively comparing prices and looking for promotions, and are increasingly switching to cheaper alternatives and chain brands.
The share of private labels (chains' own brands) in Europe has already increased by an average of around 3 percentage points, with 64 percent of financially distressed households preferring them.
The key conclusion from the analysis is that European consumers are no longer reacting in a panic, as in 2022, but are acting in an “educated“ and rational manner. They optimize their spending first within categories (changing brand, size, store), protect products with clear value or emotional significance, and seek a balance between savings and small “pleasures“.
In this sense, according to the analysis, the new inflation wave does not lead to a collapse in consumption, but to more subtle and strategic budget management – a trend that is likely to intensify as geopolitical instability continues.
The study surveyed over 8,000 adults in six European countries (UK, France, Germany, Denmark, Spain and Italy) between March 11 and 25. The results are representative of the population aged 18 and over in the respective countries.