2. The Financial Divide

Following the money with different consumer classes

In this chapter:

Assessing the economic divide
2025 spending intentions
Future growth expectations

State of Consumers

Rising debt vs. unmatched wealth

The global outlook for consumers is improving. Consumers are determined in their resilience to stay ahead, vigilant against further disruption and intentional about every aspect of their everyday spending. Some pressure points have shifted, but many have lingered in mind and body. In this climate, there is a prevailing mindset of determination, where any gains are being intentionally evaluated and repurposed wisely.

In this shift from cautious to intentional consumption, there is looming uncertainty around economic stability, personal solvency, and environmental health.

Ramon Melgarejo
President Strategic Analytics
& Insights, NIQ

2

“While the overall attitude of consumers is feeling more secure, pressure in the high-earning jobs market, increasing ‘fixed’ costs, and a growth plateau in new consumers joining the market will influence trends in 2025.

Make no mistake: Things are looking up for more consumers. But plan for them to take a very mindful approach to spending through the end of this year, given the tumultuous recent past. Spending will see modest growth, meaning there will be some opportunities for growth that will be centered around needed life essentials over wasteful indulgences.”

Divided job prospects despite stability in employment rates, some high-earning job markets face pressure.

Despite a generally positive global employment trend, some of the world’s highest-earning consumers are facing uncertainty and potential job insecurity. This “white-collar” recession is driven by factors such as automation, AI adoption, hiring freezes, and cost-cutting measures, impacting high-earning, white-collar jobs. This phenomenon could be a consequence of “The Great Resignation,” where professionals who left their roles may now find it difficult to re-enter the job market or maintain their current positions. As a result, even though a global recession may not fully materialise, these high-earning professionals may exercise increased caution in their spending habits.

It is no secret that wealth distribution is uneven globally, and recent years of disruption, including the pandemic, global conflicts, and rising inflation, have exacerbated this disparity. To better understand these impacts, NIQ has segmented consumers across a spectrum of socio-economic circumstances:

Thrivers: Financially secure and optimistic about the future.
Unchanged: Not significantly impacted and maintaining their spending habits.
Cautious: Not directly impacted financially but exercising caution in their spending.
Rebounders: Experienced income or job loss but are now recovering.
Strugglers: Facing ongoing financial insecurity.

Unfortunately, the past year has witnessed a shift towards the less financially secure end of this spectrum. Strugglers now represent 19% of consumers in Australia, a figure that has grown in recent years, and a concerning 24% in New Zealand, double that of a year ago.

However, there is a silver lining. Slightly more than half of consumers in both Australia and New Zealand remain in the Cautious group, demonstrating resilience despite economic headwinds.

Most consumers in ANZ are ‘Cautious’ with their spending, and ‘Strugglers’ are on the risea

‘Strugglers’ and ‘Rebounders’ are seeking additional income streams before taking more debt

Strugglers and Rebounders, unsurprisingly, are significantly more likely than others to seek additional income streams beyond their primary employment. This proactive approach highlights their determination to navigate financial challenges and improve their circumstances. Furthermore, Strugglers and Rebounders also demonstrate a greater propensity to take on more debt to maintain their current lifestyles.

This finding reveals the difficult trade-offs these consumers face as they strive to balance their financial needs and aspirations in an uncertain economic environment.

The higher proportion of New Zealanders diversifying income sources compared to Australians suggests a greater level of financial insecurity in New Zealand. This aligns with the previously discussed data showing a higher percentage of "Strugglers" in New Zealand.

Say they’re likely to be actively seeking additional income streams beyond their primary job