Half of ANZ consumers struggle with rising living costs

A recent NielsenIQ (NIQ) report revealed that nearly half of Australians and New Zealanders feel financially worse off due to rising living costs.

The ANZ Consumer Mid-Year Review: Guide to 2025 surveyed more than 1,600 consumers to examine the impact of financial pressures, spending habits, and trends in fast-moving consumer goods (FMCG).

Financial pressure across ANZ

The report highlighted that 48% of Australians and 52% of New Zealanders feel financially worse off compared to a year ago. In New Zealand, 52% say they are in a worse position than three years ago.

Key concerns include rising food and utility costs, with many respondents adjusting their spending habits to cope. Australians are cutting back on eating out and clothing purchases, while Kiwis report similar trends.

Both nations expect to spend more on essentials like groceries, utilities, and housing.

A rising struggle

NIQ’s findings showed an increase in consumers categorising themselves as financially “struggling.” In Australia, this group has risen to 19% (up from 17%), while in New Zealand, it has jumped to 24% (up from 12%).

“Half of ANZ consumers still feel in a worse financial position due to a higher cost of living, and there is a higher proportion of struggling consumers in both countries compared to years ago,” said Marco Silva, director of customer success at NIQ.

Emerging trends and shifts in FMCG

Despite financial challenges, several trends are shaping consumer behaviour:

• Essential spending prioritisation: Shoppers are shifting focus to groceries, housing, and utilities while cutting back on non-essentials like dining out and entertainment.
• Budget-conscious shopping: Consumers are seeking promotional deals, private labels, and alternative retailers.
• Demographic changes: Increased immigration is expected to influence preferences and demands.
• Digital innovation: The growth of omnichannel shopping, retail media networks (RMNs), and social commerce is changing the retail landscape.

Optimism for 2025

While challenges persist, NIQ projects easing inflation and economic growth in 2025. Australia’s GDP is expected to grow by 2.2%, and New Zealand’s by 1.9%, according to the OECD Economic Outlook.

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