Leading global consumer intelligence company, NielsenIQ (NIQ) has released its Australia and New Zealand-specific Consumer Mid-Year Review: Guide to 2025 report, tracking key trends in consumer sentiment around fast-moving consumer goods (FMCG), financial wellbeing, spending, and more.

The study noted that Australian and New Zealand consumers were still feeling the effects of a cost-of-living crisis, with food prices and utility costs being top concerns. Many ANZ shoppers still feel they are in a worse financial position than they were a year ago.

Half of Australians and New Zealanders still feel worse off financially, feeling the pinch of increased costs. Close to half (48%) of Australians say they are in a worse financial position compared to a year ago, which has trended down from 52%. In New Zealand, 52% of respondents say they are in a worse financial position compared to three years ago. 

The top concerns in both Australia and New Zealand are still related to higher cost of living, with rising food prices being the top concern among Australian consumers and increasing utility costs being the top concern among New Zealanders.

When asked how events of the past few years had impacted their household financial situation, survey respondents were largely ‘cautious’ with their spending. Just over half of Australians and New Zealanders, at 52% and 53% respectively, say they were not financially impacted but were nevertheless cautious with spending.

Concerningly, the number of respondents categorising themselves in the ‘Strugglers’ category increased from mid-2023 to 19% from 17% for Australians and to 24% from 12% for New Zealanders. Australians and New Zealanders are cutting back on spending on clothing and out of home eating while expecting to spend more on utilities, rent / mortgage, and groceries and household items.

Interestingly, while all consumers across Australia are going out less often, 41% of the 18-to-34-year-old age group say they are going out to bars and restaurants more often than usual, with 24% saying they go out the same amount as usual and 35% saying they are going out less often than usual. 

However, NIQ reports that inflation is expected to continue to ease, and the global economy is projected to experience steady growth in 2025. Australia is expected to grow its GDP by 2.2% in 2025, while New Zealand’s GDP growth is expected to be 1.9% in 2025, according to data from the OECD Economic Outlook.

According to NIQ, many ANZ consumers anticipate increased spending on essential categories like utilities, housing, groceries, and transportation. Conversely, they plan to reduce spending on non-essential items and experiences, including clothing, dining out, takeaways, entertainment, and appliances.

NIQ director of customer success, Marco Silva said retailers and brands should still expect shoppers to be cautious, while noting where growth can be expected.

“We all know that consumers have been through a lot of difficulties over the last five years. 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,” he said.

“However, decelerated inflation, combined with immigration, has helped fast-moving consumer goods to grow volume again after a few years, driven by higher prices driving value growth. To manage their budgets, consumers are looking into buying on promotion and private label, as well as shopping at alternative retailers to search for better deals.

“Brands cannot ignore this and need to ensure they are mapping how they are executing and how present they are at alternative retailers, as this is the piece of the market that is growing the fastest.”