EY Future Consumer Index: Brand loyalty declines as financial concerns persist
Despite ongoing financial concerns, UK consumers are increasingly prioritising value over brand loyalty, according to the latest EY Future Consumer Index. The 2025 edition of the survey reveals that while 81% of UK consumers are worried about their current financial situation, more than two thirds (77%) believe they will be financially better off or the same next year – highlighting the growing importance of value in purchasing decisions with brand loyalty taking a backseat.
The survey, which sampled 1,000 UK consumers, found that due to financial pressures, UK consumers are altering their shopping habits, and these changes appear to be permanent. Value is now the most important purchasing factor, with nearly half of consumers (45%) opting for discount retailers and 42% switching to own brand or cheaper alternatives.
The research indicates that brand loyalty is declining, with value now twice as important as brand in purchasing decisions. Retailer own branded goods, also known as private label products have become increasingly important in this context as consumers seek value and quality amidst economic uncertainty. In the UK, private label adoption is significant, with 67% of respondents stating that private label products satisfy their needs just as well as branded products.
Jason Lester, EY UK&I consumer products lead, added: “‘Consumer goods companies have spent decades building some of the world’s most recognisable and trusted brands, but the landscape is evolving quickly. In a world where value is by far the most important purchasing factor, brand loyalty is weakening. The challenge for brands is how to address both the urgent value and loyalty challenges, whilst also ensuring their brands stay relevant as consumer preferences continue to evolve.
“In the short-term, consumer goods companies need to focus their efforts on their highest performing brands, ensuring they are highly differentiated in the market, and clearly demonstrate added value to consumers. To future proof themselves, brands must adapt to evolving consumer habits, address emerging health and sustainability concerns, and find smarter ways to connect with the consumers of tomorrow.”
The survey reveals that artificial intelligence (AI) still has some way to go to be considered a key shopping tool, as 62% of UK respondents have not yet made purchase decisions based on AI recommendations. With 50% of AI suggestions favouring premium brands, visibility is crucial for consumer products companies. The benefit of AI-driven product recommendations in the shopping experience varies, with 39% of respondents finding them not useful, 36% considering them very useful, and 26% rating them as fairly useful.
Consumers are still spending on things that matter most to them
Consumers are also continuing to spend on things that matter to them, with concerns about health driving almost two-thirds (63%) of consumers to make healthier food choices. Most consumers are also happy to pay a premium for the right product over cheaper alternatives, with 63% choosing healthier fresh food options and 56% choosing healthier processed food options, whilst half of consumers are willing to pay more for more sustainable food (51%) and beauty (48%) products.
Silvia Rindone, EY UK&I retail lead, said: “The UK retail market remains challenging, with subdued consumer confidence favouring the strongest retail propositions. Retailers face rising wage costs, geopolitical tensions, and the need to transition to AI-driven solutions.
“Our latest survey shows lasting changes in consumer behaviour, similar to the post-Great Financial Crisis period, with a shift towards value-seeking. Shoppers are still willing to spend on the right propositions so retailers must focus on getting the basics right which means optimising product ranges assortments and delivering consistent value messaging.
“Looking to the future, technology, and AI in particular, will provide retailers with a new opportunity to reshape their organisations and improve the customer proposition. Many retailers are adopting AI to increase both the efficiency and effectiveness of their teams, but there are also opportunities to deliver greater personalised propositions and services. Our survey showed that over half of UK consumers are already using AI to enhance their online shopping experience. The risk for retailers is that they fail to adapt and miss an opportunity to reach the consumers of tomorrow.”