A recent survey has revealed that soaring consumer prices is the number one cause for concern amongst Germans right now. In fact, inflation is causing more worry among the German populace than coronavirus and the war in Ukraine.
Inflation has become a major headache for consumers in Germany, with inflation rates hitting a historic 40-year high last month. Almost everything, from supermarket prices to the cost of energy, has been affected by the rising prices. This has become a serious cause for concern in Germany, even more so than the coronavirus pandemic and the war in Ukraine, according to a survey undertaken by the McKinsey management company.
The survey asked more than 1.000 people about their biggest concerns. Around 40 percent of respondents stated that their biggest concern was inflation, with 29 percent of people saying they were worried that rising prices would force them to restrict their lifestyles. Two-thirds of respondents assumed that prices will continue to rise over the next year. By comparison, 34 percent of respondents stated the Russian invasion of Ukraine was their biggest cause for concern. Only 8 percent of people named the pandemic as their primary cause for worry.
The rising cost of living in Germany is leaving its mark on consumers, with both high-income and low-income earners being forced to cut back on spending. "Two years of corona have left their mark. But inflation and the invasion of Ukraine are making people more pessimistic than ever before," said McKinsey expert Marcus Jacob.
The survey also revealed that consumers have had to curb spending to compensate for the rising costs of living. Two-thirds of respondents indicated that they have spent more money on groceries recently, while 61 percent said that they have had to splash out more cash on transport, petrol and energy costs. Consumers have subsequently slashed their spending on cosmetics, clothing, entertainment and travel. "Particularly industries that were already badly affected by the pandemic are also affected by the new austerity," reported McKinsey expert Simon Land.
Two-thirds of consumers have started to change their spending habits in response to the rising prices, according to the survey. This includes switching to cheaper brands and shopping at discount shops more often. The majority of respondents also said they had become more aware of how much they were spending on energy at home.