An update on European consumer sentiment: As pessimism grows, what happens to holiday spending?

Despite improvements in economic indicators—including lower unemployment, falling inflation, and GDP growth—consumer optimism in five European economies decreased in the fourth quarter of 2024. Even so, optimism remains slightly higher than it was a year ago, and consumers indicate an increased willingness to spend in some discretionary categories.

The following charts highlight findings from our latest ConsumerWise research in France, Germany, Italy, Spain, and the United Kingdom. (This survey was conducted prior to the US election in November and therefore does not reflect the election outcome’s impact, if any, on European consumer sentiment.)

The discrepancy between relatively positive economic indicators and decreased consumer optimism in Europe reflects the nuanced reality of the postpandemic recovery. To contact us for more information or to read additional insights, check out our ConsumerWise page.

ABOUT THE AUTHOR(S)

Jessica Moulton is a senior partner in McKinsey’s London office, where Gizem Ozcelik and Nadya Snezhkova are consultants; Fleur Porter is an associate partner in the Paris office.

This article was edited by Alexandra Mondalek, an editor in the New York office.

During the third quarter of 2024, European consumers reported feeling slightly more optimistic about the economy. Stabilizing household finances and reduced inflation concerns drove this increase in optimism. Trading down remained a common behavior, but new data suggests this trend may be shifting. The following charts highlight findings from our latest ConsumerWise research in five European countries: France, Germany, Italy, Spain, and the United Kingdom.

In the third quarter of 2024, consumer optimism in Europe grew slightly, attributable to improved feelings about the economic and geopolitical climate. The tourism sector rebounded strongly over the past several months, supporting economic growth and providing a cushion against broader economic uncertainties. However, consumers remain cautious heading into the fall. So long as inflation continues to gradually decline, consumers in Europe may experience a modest increase in purchasing power, which may then translate into stable spending.

To contact us for more information or to read additional insights, check out our ConsumerWise page.

ABOUT THE AUTHOR(S)

Jessica Moulton is a senior partner in McKinsey’s London office, where Gizem Ozcelik is a capabilities and insights specialist and Nadya Snezhkova is a senior expert.

This article was edited by Alexandra Mondalek, an editor in the New York office.

During the second quarter of 2024, consumer optimism in Europe grew slightly from the previous quarter, although most consumers continued to report having mixed feelings about the economy. A greater share of younger consumers said they planned to selectively splurge compared with older consumers, and they reported an interest in treating themselves to dining out and travel. As we’ve seen for much of the past year, consumers across Europe also said they continued to trade down. Together, these data indicate that consumers may have finally adjusted to higher-than-usual inflation, which suggests their shopping behaviors may have stabilized for the time being. The following charts highlight findings from our latest ConsumerWise research in five European countries: France, Germany, Italy, Spain, and the United Kingdom.

In the second quarter of 2024, slightly more consumers in Europe reported optimism in the economy, marking an improvement from the previous year. As the year progresses, lingering uncertainties about the geopolitical climate may influence consumer spending patterns. Although consumers demonstrate somewhat conflicting behaviors—selectively splurging, while also trading down—they are likely to continue prioritizing value in their purchases. To contact us for more information or to read additional insights, check out our ConsumerWise page.

ABOUT THE AUTHOR(S)

Jessica Moulton is a senior partner in McKinsey’s London office, where Gizem Ozcelik and Nadya Snezhkova are consultants; Anja Weissgerber is the leader of strategy and operations for McKinsey’s Consumer Packaged Goods and Retail Practices globally and is based in the Berlin office.

This article was edited by Alexandra Mondalek, an editor in the New York office.

In the first quarter of 2024, consumers in Europe once again reported having mixed feelings about the economy, but their concerns didn’t stop them from spending on discretionary items. Travel and self-care were two categories that these consumers expressed interest in. Even so, cautious consumers continued to trade down. The following charts highlight findings from our latest ConsumerWise research in five European countries: France, Germany, Italy, Spain, and the United Kingdom.

At the start of 2024, consumers in Europe reported economic sentiment and behavior similar to the feelings and behaviors they reported in 2023. As we move further into the year, lingering uncertainties about the global economy and geopolitical landscape may continue to affect consumer spending habits. Consumer goods and retail businesses will need to provide value to their customers to battle these potential headwinds. To contact us for more information or to read additional insights, check out our ConsumerWise page.

ABOUT THE AUTHOR(S)

Jessica Moulton is a senior partner in McKinsey’s London office, where Gizem Ozcelik is a specialist and Nadya Snezhkova is a consultant; Thomas Rüdiger Smith is a partner in the Copenhagen office; and Anja Weissgerber is the leader of strategy and operations for McKinsey’s Consumer Packaged Goods and Retail Practices globally and is based in the Berlin office.

This article was edited by Alexandra Mondalek, an editor in the New York office.

Consumers in Europe reported mostly mixed feelings about the economy in November, with a decrease in optimism from the previous quarter. These sentiments translated into various behaviors—such as trading down—that were also evident earlier in the year. Meanwhile, environmental, social, and governance (ESG) factors continued to influence consumer behavior in Europe. The following five charts highlight findings from our latest ConsumerWise research in five European countries: France, Germany, Italy, Spain, and the United Kingdom.

European consumers closed out 2023 engaging in many of the same purchasing behaviors they had exhibited throughout the year. As the new year unfolds—with questions still lingering about the state of the global economy and geopolitics—consumer goods and retail businesses will have to continue to deliver value to discerning consumers. Check out our ConsumerWise page and contact us for more information and additional insights.

ABOUT THE AUTHOR(S)

Jessica Moulton is a senior partner in McKinsey’s London office, where Gizem Ozcelik is a specialist and Nadya Snezhkova is a consultant; Thomas Rüdiger Smith is a partner in the Copenhagen office; and Anja Weissgerber is the leader of strategy and operations for McKinsey’s Consumer Packaged Goods and Retail Practices globally and is based in the Berlin office.

This article was edited by Alexandra Mondalek, an editor in the New York office.

Consumers in Europe reported mixed feelings about the economy in August. Those feelings manifested into a range of behaviors—for example, price became a more important factor in purchase decisions. A greater emphasis on the omnichannel experience, as well as health and environmental considerations, also characterized European consumer behavior in the third quarter of 2023. The following six charts highlight findings from our latest ConsumerWise research in five European countries: France, Germany, Italy, Spain, and the United Kingdom.

This snapshot of the European consumer reflects the complicated world around them, one in which uncertainty lingers. The survey results indicate that value may become a more important purchase consideration, but certainly not the only one. European consumers are open to new experiences and to discovering brands across a variety of channels, creating valuable opportunities for consumer goods and retail businesses across the region. Check out our ConsumerWise page, and contact us for more information and additional insights.

ABOUT THE AUTHOR(S)

Jessica Moulton is a senior partner in McKinsey’s London office, where Nadya Snezhkova is a consultant; Thomas Rüdiger Smith is a partner in the Copenhagen office; and Anja Weissgerber is the leader of strategy and operations for McKinsey’s Consumer Packaged Goods and Retail Practices globally and is based in the Berlin office.

The authors wish to thank the ConsumerWise team, including Christina Adams, Kari Alldredge, Emmeline Hale, Andrea Leon, Andrew Pitakos, and Jonathon Rivait, for their contributions to this article.

This article was edited by Alexandra Mondalek, an associate editor in the New York office.

To save or to splurge? That is the question confronting European consumers, who have the most optimistic economic outlook they have had in at least a year, in the face of continuing price increases. For some, the answer is “both.” The following five charts highlight findings from our latest ConsumerWise research survey, conducted in May 2023 in five European countries: France, Germany, Italy, Spain, and the United Kingdom.

The snapshot of the European consumer today reflects the tension between intending to spend and save under the pressure of higher prices, albeit with more nuance than one might find in a typical economics textbook. These sentiment data indicate that value may become a more important driver of purchases—but certainly not the only one. Check out our ConsumerWise page and contact us for more information and additional insights.

ABOUT THE AUTHOR(S)

Jessica Moulton is a senior partner in McKinsey’s London office, where Nadya Snezhkova is a consultant; Thomas Rüdiger Smith is a partner in the Copenhagen office; and Anja Weissgerber is the leader of strategy and operations for McKinsey’s Consumer Packaged Goods and Retail Practices globally and is based in the Berlin office.

The authors wish to thank the ConsumerWise team, including Christina Adams, Kari Alldredge, Emmeline Hale, Andrea Leon, Andrew Pitakos, and Jonathon Rivait, for their contributions to this article.

This article was edited by Alexandra Mondalek, an associate editor in the New York office.