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Kearney Consumer Institute Releases 3rd Consumer Stress Index: Politics and Economics Prompt Stress in Select Countries

"Our research found that two-thirds of Americans are living paycheck to paycheck—amid this, they need a source of reliability and consistency. Rather than contribute to uncertainty through practices like shrinkflation, brands have the ability to lend a sense of clarity and stability to our 'resigned' consumer."

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GLO

Recurring Stressors Create the “Resigned Consumer”

–       In the U.S., more consumers are pessimistic (48%) than optimistic (29%) about the country’s political future

–       U.S. Consumer Stress Index up +2.3 percentage points from Q1 2024

–       Even larger uptick in France (+4.5 points)

–       Globally, in 7 of 12 countries, more consumers are pessimistic than optimistic about their country’s political future

The Kearney Consumer Institute (KCI), an internal think tank of global strategy and management consultancy Kearney, released the third quarterly edition of its Consumer Stress Index. Based on a finely calibrated set of macroeconomic data and consumer input, the Index provides a multi-faceted view of consumer sentiment, beyond economics. The new report, Kearney Consumer Stress Index Q2 2024, finds that 7 out of 12 countries, including the U.S., saw an increase in stress from last quarter—a sharp contrast from last quarter’s Index.

“Consumers around the world can only be described as ‘resigned,’ with political and economic insecurity manifesting stress differently from country to country,” noted KCI lead Katie Thomas, who heads up the ongoing research series. “In the U.S. and some other Western countries, this has led to a perceived loss of agency, with consumers feeling powerless in the face of continued uncertainty. Amid this state of both persisting challenges and politics changing by the day, people feel they have less power over their lives and their future.”

The Stress Index tracks multiple components: macroeconomic data, which is updated annually, and consumer sentiment, which is calculated using two elements: consumer flexibility, consumer agency in terms of perceived optionality and ability to impact conditions; and consumer sensitivity or awareness—what issues are top of consumers’ minds and how they are feeling. Data for the Q2 2024 report was fielded in June.

“In looking at consumer behavior, it is critically important to get as complete a picture as possible, as there can be lots of anomalies at play,” said Katie Thomas. “For example, political stress feeds into financial stress—the generalized stress of politics may lead to personalized stress pegged to the economy, as can be seen with popular sentiment that jobs and personal finance are at risk even as data on job growth, inflation, and gross national product point to a robust economic picture.”

The Q2 report found that Geopolitics & Government is once again the top stressor, as it has been since the initial index was released in January 2024. In over half of the countries surveyed, more consumers are pessimistic than optimistic about their country’s political future. Respondents who were pessimistic about their country’s political future had a stress index more than 7 points higher than those who were optimistic, showing how political stress bleeds into stress across all macroeconomic factors.

“When consumers are stressed about their country, this often translates into stress about their finances,” Thomas observed. “Our research found that two-thirds of Americans are living paycheck to paycheck—amid this, they need a source of reliability and consistency. Rather than contribute to uncertainty through practices like shrinkflation, brands have the ability to lend a sense of clarity and stability to our ‘resigned’ consumer.”

KCI’s advisory for consumer-facing businesses is to help provide consistency and aim for clarity in their packaging, pricing, and marketing. Softer, less direct messaging—avoiding messages that exacerbate politics- or technology-related stress—is one key to help alleviate generalized consumer stress.

Read the full report by clicking this link.

Kearney Consumer Stress Index Methodology

The Kearney Consumer Stress Index was created to examine consumer behavior globally by taking a broader view of consumer sentiment. It combines proprietary research, surveys, and analytics with publicly available data and reports, weighing and balancing macroeconomic factors, consumer flexibility, and consumer sensitivity.

Macroeconomic sources comprise 50 data points from leading global sources such as Oxford Economics, which are then organized into five pillars—consumer wallet and finances, health and education, geopolitics and government, food and the environment, and innovation and technology—across 15 sub-categories. This provides a quantitative, factual baseline for the initial analysis of consumers.

Both the consumer flexibility and consumer sensitivity sections use proprietary consumer surveys as their primary input, with more than 20,000 global consumers surveyed (2,000 respondents in each of 12 countries). Survey results are used to determine scores across pillars and sub-categories. The consumer flexibility component shows consumer optionality and ability to flex to, and/or impact or influence, changing conditions. The remainder of the model—consumer sensitivity—reflects consumer top-of-mindedness and feelings on pillar sub-factors.

Combined, the three elements create the Index, the values of which reflect relative changes within a country based on consumer stress, leading to potential changes in behavior.

About the Kearney Consumer Institute

The Kearney Consumer Institute (KCI) evaluates today’s business challenges and opportunities through the eyes and experiences of consumers, advocating a consumer-first perspective. By leveraging consumer behavior data and insights, the KCI helps generate conversation, and ultimately action, around how to address consumer needs with meaningful benefits.

Using a consumer-first lens the KCI looks at today’s consumer revolution not by thinking about consumers, but by thinking like consumers. Our consumer-centric approach includes simple, precise, plain-language conversations on topics like trends, consumer communities, convenience, loyalty, service, fair pricing, and product development and technologies.

About Kearney
Kearney is a leading global management consulting firm. For nearly 100 years, we have been a trusted advisor to C-suites, government bodies, and nonprofit organizations. Our people make us who we are. Driven to be the difference between a big idea and making it happen, we work alongside our clients to regenerate their businesses to create a future that works for everyone. www.kearney.com

SOURCE Kearney

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