Global Consumers Plan to Spend Less in 2025; Focus on Higher Grocery Prices to Limit Discretionary Spending - AlixPartners 2025 Consumer Outlook

• More than 75% of consumers globally expect lower or flat personal spending in 2025 – 31% expect to spend less, 47% aim for flat spending
• Consumers in China and Middle East, as well as younger consumers, aim to spend more on a net basis
• Higher spending on essentials, including food, to come at the expense of discretionary spending – such as eating out and entertainment outside of home

NEW YORK (December 10, 2024) – More than 75% of global consumers expect to reduce or maintain overall spending in 2025, an intention that could lead to less of the budget devoted to several priorities, including eating out, out-of-home entertainment, and retail purchases other than food, according to the 2025 Global Consumer Outlook published today by AlixPartners, the global consulting firm.

The report, based on responses from 15,434 consumers from nine countries, shows the spending increases anticipated by consumers in China and the Middle East, being more than offset by expected restraint in the U.S. and Europe. Grocery stands as the lone category where consumers expect to spend more regardless of where they live, according to respondents. Persistent food-price inflation and the cost of other necessities is resulting in lower spending on discretionary purchases. 

According to the research, conducted in September and October, global net consumer intent for spending shows a 12% decline for 2025 compared to this year’s already-muted spending levels year, likely spelling another challenging year for consumer-facing industries. Some 31% of consumers surveyed say they will spend less; 47% will hold budgets steady; and just 19 will spend more. European consumers and older consumers say they intend to show the most restraint, while younger consumers and wealthier consumers intend to open their wallets a bit wider next year.

"Consumers tell us that while price matters, it is only part of the equation,” said Randy Burt, a partner and managing director with AlixPartners. “The desire for value goes beyond seeking the cheapest deal. Quality and satisfaction are critical in shaping purchasing decisions, especially as consumers adjust budgets and spend less on non-necessities.”

Consumers in China, where inflation and unattainable housing prices influence spending plans, survey respondents said higher spending in 2025 is partially due to inflation but also driven by a desire to attain immediate gratification. While nearly one-fifth of respondents in China plan to make cuts in 2025, 39% plan to boost spending, leading to a net increase of 10% (factoring 43% of respondents not intending any changes). Respondents in the Middle East are following suit, driven by the 13% net increase in global spending intentions for 2025, the survey said.

“The positive outlook in the Middle East diverges from the West’s spending pullback,” Hisham Abdul Khalek, a partner and managing director with AlixPartners said. “Consumers in the region plan to spend more in 2025, driven by a strong economic outlook.”

While U.S. consumers in general take a more frugal stance into the new year, those plans can change based on economic factors. When polled in September and October, respondents in the U.S. reported a 16% net decline in global spending intentions – lower than France (30%), the U.K. (20%) and Germany (20%), and on par with Italy and Switzerland. However, a U.S. consumer pulse survey conducted by AlixPartners after the presidential election revealed a 14-percentage point net positive shift toward spending more in 2025.

AlixPartners’s report, titled Spending, Disrupted, identified several key trends across spending categories, geographies, and income levels, including:

• 31% of high-income respondents intend to spend more, while 19% intend to cut back. Of those reporting medium income, 20% intend higher spending; 27% intend lower spending. For low income, only 16% intend to spend more, while 36% plan to cut back.
• Younger consumers (18–34 age group) display a readiness to spend more—though perhaps a greater share of a relatively smaller budget—whereas the 55+ age group is most likely to spend less.
• Among the top ways respondents plan to reduce spending:
  • Staying home to eat or for entertainment
  • Staying home during time off
  • Avoiding product categories, including items not needed
  • Better planning for grocery shopping, avoiding the impulse buy
• Only 15% of consumers say they will spend less on groceries globally. Across every country, age group, and income bracket, this is consistent: more than 80% of consumers expect to spend the same or more on groceries in 2025. One-third of consumers plan to spend less on non-food retail in 2025, while only 16% plan to spend more.
• While 31% of consumers globally plan to spend less on travel, a notable 28% plan to spend more – driven by younger and high-income consumers.
• Globally, 34% of consumers plan to spend less on eating out, and only 19% plan to spend more. A third of consumers from the UAE, Saudi Arabia, and China indicate they will spend more on dining out. France leads the way on potential cutbacks in this area, followed by the U.S., Germany and Switzerland. Lastly, younger and higher-income groups appear more likely to spend more on dining out.

“Price sensitivity has increased significantly over the past 24 months, with consumers limited in their capacity to keep up with the cost of travel, out-of-home experiences, and other discretionary products and services,” said Beatrix Morath, a partner and managing director, and global co-leader of AlixPartners’ Hospitality & Travel Practice. “For operators, this creates challenges on multiple fronts. They need to figure out how to optimize business models to maintain competitiveness, earn customer loyalty and drive demand.”

AlixPartners’ survey also identified 6 Reasons Why Consumers Will Spend Less in 2025:

1. Less money to spend
2. Spending priorities are being reordered
3. At-home media options are readily available
4. Value-for-cost equation is not attractive
5. Broad effort to lead a healthier lifestyle
6. Desire to minimize food waste

“The 2025 Consumer Outlook reveals how dynamic economic realities and an ever-changing marketplace impact the consumer’s intentions going into a new year,” Burt said. “Understanding the balance of necessity, value and customer experience will be crucial for companies navigating this complex spending landscape.”

 

About AlixPartners

AlixPartners is a results-driven global consulting firm that specializes in helping businesses successfully address their most complex and critical challenges. Our clients include companies, corporate boards, law firms, investment banks, private equity firms, and others. Founded in 1981, AlixPartners is headquartered in New York, and has offices in more than 20 cities around the world. For more information, visit www.alixpartners.com.

 

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