Fresh increases in energy costs, including a 13 per cent rise in the UK energy price cap from July and higher global gas prices linked to geopolitical tensions, risk deepening cost-of-living pressures for consumers.
According to GlobalData, more than half of shoppers remain highly concerned about their finances, with younger generations feeling the greatest strain.
The report suggests that consumers are increasingly adopting long-term money-saving habits, including buying less, trading down to cheaper products, choosing own-label alternatives and delaying premium purchases. As a result, brands will need to focus on demonstrating tangible value rather than relying on premium positioning alone.
As shoppers become more discerning about their purchases, brands will need to decide how they can help alleviate some of these cost pressures and protect market share, says GlobalData, a leading intelligence and productivity platform.
With recent news that the UK energy price cap will rise by 13% from July 2026, and that US gas prices have reached their highest level in four years, partly due to the Iran war disrupting global energy supplies, global attention is turning back to the cost-of-living crisis.
The focus for brands will be on how consumers are managing grocery spending as budgets tighten and wages stagnate—recent ONS* data shows UK pay growth is at its slowest rate in more than five years.
Cost-of-living concerns persist for millions of consumers, especially younger cohorts
For many consumers globally, cost-of-living pressure is now a structural, not a cyclical concern, with over half (54%) of shoppers being highly concerned about their personal finances, while only 15% are not concerned, according to GlobalData's Q1 2026 global consumer survey.
Mark Jephcott, Associate Consumer Analyst at GlobalData, comments: “Worry intensifies when consumers think beyond the immediate horizon, with over half (58%) of global shoppers highly concerned about the long-term impact of the cost-of-living crisis.
"This points to a “watching every pound” mindset that is likely to endure, shifting behavior from short-term belt-tightening to more durable, habit-forming changes, such as buying less as a matter of routine, trading down, simplifying shopping repertoires, and delaying premium purchases.”
However, globally, pressure on budgets is unevenly distributed by age, with around a third of Gen Y and Gen Z reporting being “extremely concerned” about their personal financial situation, versus just 13% of Boomers.
This matters strategically as younger cohorts are actively forming household routines and brand preferences. Value perceptions built now may become long-lasting reference points, making it harder for brands to re-establish premium price positions later.
Learnings from household care and laundry market
Brand strength comes from nearly a third of consumers globally defining value as a balance of quality (31%) and price (30%), not simply the lowest shelf price on offer.
The household care and laundry categories' approach to helping consumers manage their household budget includes strategies, such as building a “value ladder” that keeps shoppers in-brand (not in-category), with a clear brand architecture of ‘good/better/best’ tiers.
Brands achieve this by enhancing ingredients (such as fragrances) and performance claims to deliver superior quality, while also simplifying formulations to create lower-cost alternatives.
Making value provable by shifting messaging from “premium” to “cost-per-use performance”, shifts quality into visible, specific proof points, such as “works in cold washes”, that consumers can easily connect with, rather than generic messages around superiority.
In a category full of nuanced choices around fragrances, performance, and ingredient efficacy, creating simple decision cues at the shelf and online using on-pack roundalls, icons, comparison tables, and QR codes helps to reduce the effort shoppers need to make in their product choices.
Offering smaller packs or trial sizes to reduce upfront cash outlay, which is important for younger and smaller households, reduces purchase risk for first-time buyers and helps to drive penetration. Maintaining value packs for stock-up missions remains a key portfolio component, but savings need to be presented in a clear and explicit way, such as per-use math on-pack. Prioritizing concentrated formulations and refills delivers both “smart value” (lower cost per use) and practicality (less storage/waste).
Jephcott adds: “As the cost-of-living crisis persists and budgets tighten, for many consumers globally, watching what they spend on grocery shopping is now a permanent feature of their daily routines, driving lasting behaviours like buying less, trading down, buying own label, and delaying premium purchases. Brands can respond by proving value via cost/benefit per use, offering tiered ranges, clear quality cues, right-sized packs, refills and multipurpose benefits.”