Consumer Spending Trends in Europe

See how consumers spending habits and trends are evolving in Europe

January 21, 2025 – Consumers’ spending priorities influence the food and beverage industry, driving demand for affordability, quality, and value-driven choices that align with evolving lifestyles and financial situations. Innova’s 360 research highlights consumer spending trends, ethical values, and what may develop within the future in Europe.

Consumers Economic Conditions

Inflation rates in the Eurozone and the UK have stabilized over the past year, but consumers still feel the impact of rising prices and high costs of living. In Europe, 67% of consumers have noticed the rise in food and beverage prices in the past 12 months. With inflation and financial constraints, younger consumers show optimistic traits and focus on mood-uplifting and socializing aspects of food and beverage.

Financial concerns remain a top priority, with 44% of Europeans worried about the impact of their personal finances on them and their family. In Germany and the UK, personal finances are the top concern. All generations are concerned about the impact of personal finance, followed by various health concerns.

1 in 5 consumers are expecting their financial situation to be better. Younger generations are more optimistic about their financial future, with 33% of Gen Z and 30% of Millennials in Europe expecting to be financially better off in the next year.

Consumers Spending Priorities

Spending trends among European consumers display varied patterns on food and beverages. While German and Spanish consumers have increased their spending, French and British consumers display a decline. The majority of European consumers expect no major changes in their food and beverage spending over the next year, but individual markets differ when it comes to the anticipated changes.

Reflecting on consumer spending trends, inflation remains the primary driver of increased spending, while financial concerns push most consumers to cut back. To reduce spending, consumers seek promotions and switch to lower-cost items. Within consumer spending trends, cost and value for money are the top factors in food and beverage purchasing, and their importance increases with age. Consumers also associate value for money with premium quality and healthiness. Beyond living essentials, consumers will prioritize spending on holidays, health and wellbeing, and hobbies over the next 12 months. Spending trends indicate that German consumers are most likely to spend money on products, while Spanish consumers prefer spending on services.

consumer spending trends in Europe

Private and Store Labels Trends

65% of European consumers have noticed price rises in food and beverage, and they are taking diverse measures to reduce their spending.

Consumers are cooking from scratch, buying products with discounts, and opting for bulk purchases. Consumer spending trends show that European consumers are also increasing their purchase of private label brands, particularly in Spain and the UK. Cost/value perceptions are the main reason for Europeans to turn to private label brands. However, accessibility and product quality of store brands also play a role. Older consumers are especially cost-driven in their shift to private label.

Most Europeans perceive little difference between private labels and store brands across indulgence, health, nutrition, variety, accessibility, or environmental and social factors. Private label brands are expanding their product range to appeal to a larger consumer base.

Ethical Spending Trends

Reflecting on spending trends, 2 in 5 European consumers consider ethical values important in their diet, with Millennials particularly willing to pay more for sustainable brands or products. Animal cruelty is the top concern, followed by water shortages, ocean pollution, and deforestation that consumers are willing to pay extra for to solve.

Environmental and ethical factors influence purchasing decisions of meat substitutes and plant-based dairy. However, changing budgets is the main reason for reduced consumption of meat and dairy alternatives. Most consumers would like to see more affordable meat substitutes, especially in Spain and Germany. Private label brands are gaining attention, making meat alternatives more accessible.

What’s Next in Consumer Spending Trends?

In Europe, consumers are looking for ways to reduce their spending. They are increasingly looking to buy more products on promotion and buy lower-cost items as well, which may change the spending trends among consumers. Private label brands are gaining attention, offering a balance of affordability, accessibility, and quality. Value for money is the key in influencing purchase decisions, creating an opportunity for brands to emphasize high quality claims, discounts, and cost-effective offerings.

At the same time, European consumers are willing to pay extra for ethical issues, especially animal welfare. Brands that highlight ethical commitments in animal-based products can attract consumers who want to help solve ethical issues. Brands that effectively balance cost-conscious offerings with ethical commitments are likely to stand out in an evolving European food and beverage market.

 

This article is based on Innova’s Now & Next in Spending Priorities of Consumers in Europe report. This report is available to purchase or with an Innova Reports subscription. Reach out to find out more

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