Consumer intelligence company, NielsenIQ (NIQ), has released its Mid-Year Consumer Outlook: Guide to 2025 report, analysing the latest trends in consumer spending and catalysts for change across industries.
With the global economy facing ongoing and unprecedented challenges, understanding consumer behaviour has become critical for businesses seeking to thrive in an ever-evolving landscape.
Gathering feedback from over 17,000 online consumers in 23 countries, NIQ’s report aims to better understand the current economic environment for consumers – including what they're buying, and why. The survey was conducted between June and July 2024.
The report anticipates that global consumers will spend US$3.2 trillion (approximately AU$4.9 trillion) more in 2025, representing nearly 6 per cent growth compared to 2024, according to World Data Lab.
With looming uncertainty around geopolitical crises, economic stability, and environmental health, the study stated consumers are becoming resilient and are spending where it matters most. This shows a determined shift from cautious to intentional consumption, with a focus on a sense of prosperity and well-being.
NIQ COO, Tracey Massey, said there is increasing demand for AI-driven insights based on large quantities of granular data that only NIQ can deliver.
“Having your finger on the pulse of current and expected consumer behaviour that is benchmarked globally is now table stakes to establish and maintain any competitive advantage,” said Massey.
The report identified some global catalysts to change in 2025, expected to change the way consumers interact with the world. For Australian consumers, these include:
- Readiness for AI: 30 per cent of Australian consumers are likely to accept a product recommendation from their AI assistant, and 30 per cent would leverage AI to automate and speed up their everyday shopping decisions.
- The rise and impact of GLP-1 drugs: Aligning with the global data, 31 per cent of Australian consumers are likely to use a medication or drug to support weight loss.
- Omnichannel evolution: Some 34 per cent of Australian consumers say they are likely to spend more on a purchase because of an in-app challenge, point system or reward experience.
- Hot commodity costs: Aligning with the global figures, 60 per cent of Australian consumer respondents say they will buy fewer snacks and confectionary products if prices continue to increase or remain high for the next three months.
- Additional Income: More than half of Australian consumer respondents (55 per cent) say they are likely to actively seek additional income streams beyond their primary job.
Top trends framing expected 2025 spending:
- Consumers’ top concern (33 per cent) remains rising food prices, followed by increasing utilities costs (20 per cent) and the threat of an economic downturn (19 per cent). Climate change is fourth (14 per cent), owing to the numerous extreme weather events around the world.
- A majority (67 per cent) of surveyed consumers around the globe say they are likely to change or try a new brand because of lower pricing.
- They intend to continue cutting back on non-essentials like Out-of-Home (OOH) Dining (38 per cent), Out-of-Home Entertainment (37 per cent), and Food Delivery/Takeaways (36 per cent). Expect to see decreased spend on OOH activities, while intentional choices around In-Home Entertainment (48 per cent) and spending on Socializing/Gatherings (46 per cent) are likely to be maintained in 2025.
- Meanwhile, private label product interest continues to rise, with 50 per cent of consumers buying more private label products than ever. Meanwhile, 40 per cent of global consumers say they would switch to a private label product they enjoy, even if it costs more.
- North American consumers worry most about rising housing costs, while global conflict is a top concern for Africa, Middle East, and Europe.
- The pace of monthly consumer packaged goods (CPG) inflation continues to slow across countries, down to less than 2 per cent growth YoY. Regionally, CPG inflation is also trending down, but it remains higher than average in Latin America and Africa. Monthly global prices have risen fastest in Latin America, which has seen as much as 9 per cent YOY growth.
- Upselling opportunities: Intentional consumers are willing to pay a premium for worthwhile attributes. In Tech & Durables, unit sales of premium priced smart / mobile phones are up 17 per cent in 2023 vs. 2019, compared with economy options, which are down -32 per cent in the same period.
Australian respondent sentiment on expected 2025 spending:
- Rising food prices is also Australian consumers’ top concern over the next six months, with 36 per cent of respondents indicating as such. Increasing utilities cost followed as the second biggest spending concern for Australians (23 per cent), followed by increased housing costs (21 per cent), while concerns over economic downturn and rising interest rates were both even at 14 per cent.
- Many Australian consumers (41 per cent) intend to spend less on out-of-home dining in the next 12 months. The same proportion (41 per cent) expect to spend less on clothing and apparel.
- For out-of-home entertainment, for example: cinemas, theme parks, shows and sports events, 37 per cent of surveyed Australian consumers expect to spend less in the next 12 months, and 39 per cent of Australian consumers say they will cut back on food delivery and takeaways.
NIQ global thought leadership vice president, Lauren Fernandes, said over the past six months, there has been a determined shift from cautious to intentional consumption habits.
“Consumers are willing to spend more but remain conscious of potential changes, and are seeking value with every purchase in multiple ways,” said Fernandes.
“They are spreading their spending very purposefully – and expect to leverage any excess in strategic ways in 2025 and beyond.”
