Kantar has released a new Consumer Sentiment Barometer focused on the tariff turmoil, which reveals that over two in five Australians (42 per cent) claim that they will stop buying US products and services and over half that they will buy more local products and services (53 per cent).
The Barometer data also shows significant shifts in buying behaviour – Australians are cutting back on big ticket items like cars and overseas holidays, shifting their expenditure and saving more as they continue to grapple with the high cost-of-living.
They are still spending, redirecting their hard-earned dollars to small indulgences and want to still have a nice time but spend their money more locally.
While it is easier to anticipate cutbacks to happen on big ticket items, even day-to-day items are feeling the heat; for example, fast food and takeaways (41 per cent), new clothes (39 per cent), streaming services (37 per cent) and a few drinks in a bar (38 per cent). This is compounding issues ever-present due to an already stalling economy.
No brand is safe as people globally are already cost-cutting, bargain hunting and trading down due to ongoing cost-of-living pressures. The Barometer does reveal however, marked differences in drivers of behaviour across the world. Here in Australia, 43 per cent of people are deliberately looking for price reductions.
Consumers locally feel that business profiteering (51 per cent), rising energy costs (64 per cent) and economic policies (52 per cent) are driving up the cost-of-living, with four in five believing it to be the government’s responsibility to address economic, political, social and environmental concerns.
“In this poly-crisis world, people are uncertain – and genuinely so,” says Mark Kennedy, Kantar Australia’s Managing Partner – Consulting.
“When ‘enshitification’ was announced as the Macquarie Dictionary word of the year in 2024, it wasn’t hard to figure out that Australians were feeling a little over it. Add tariffs to an already tumultuous world and it’s important to understand public sentiment and how this is impacting people’s behaviour, what’s changing, what’s staying the same and where opportunity lies.”
“To make your own luck in turbulent times, foresight becomes critical. Now unfortunately, even at Kantar, we don’t have a crystal ball, but we can build possible scenarios based on the data we have. This scenario planning process was both eerily accurate and dramatically helpful for businesses across the world managing the impact of COVID. Understanding the possible scenarios, and the impact of these possible futures on your individual category and brand, forms the basis of effective strategic planning and the ability to make your own luck.”
“It’s a true reflection of the ‘will he/won’t he?’ conundrum. But what is clear is that in an uncertain world, Australians are searching for safe harbours. Whilst Australians still have feelings for the USA, things just aren’t what they used to be. Maybe it’s time for a little distance, some ‘me time’ or to reconsider our true feelings for each other.”
“What is clear is that in Australia, the disparity is growing, and the impact is not being felt equally across the population, and across business,” adds Kennedy.
“There is no single direction of ‘travel’. In market disruption, your strategy becomes more impactful. But for many, people aren’t clear what ‘good’ looks like in Australia. They do not have a clear measurement or benchmark about what growth really should be – what’s the number? Many only have their ‘lived experience’. What is critical is that if your business is underperforming in good times, but you can’t see it, there is an instant impact in the bad times. What this means is that you haven’t built your brand in a way that it is defending you. You are not clear on your scenario planning. Now is the wrong time to be passive. When things move and changes are unequal you must step forward.”
“Deciding not to do something it is an ACTIVE decision – and one that is extremely risky. Marketers need to understand not only the meta picture but more importantly, the relevance to your business and brand, and your context. And that requires smart scenario planning: that is, understanding what most relevant to you, and taking bold action to address it.”
The Kantar Consumer Sentiment Barometer was run in 20 markets and reveals that globally, the tariff turmoil blame is squarely aimed at the US (71 per cent) but varied feelings in local markets towards their own government’s response. There is – unsurprisingly – particularly positive approval of government responses in Canada and Mexico.
Across APAC, both Japan and South Korea are the prominent markets where consumers report issues with Japan (60 per cent) highest for expecting their economy to worsen next year. Markets where consumers feel most comfortable about the economy and meeting their outgoings are India, Saudi Arabia and the UAE.
Kantar’s research also reveals five key learnings that separate the companies that find opportunity in turmoil and those that become a victim of it.
- They are meaningfully different to more people. Understand what you’re up against. As costs increase, some brands might become more discretionary. Market understanding is key: make sure you’re clear on your competitive set and positioning.
- They don’t go dark. Investing in your brand equity is essential. While it might be tempting to ‘go dark’, reducing ad spend significantly extends recovery. It erodes awareness and base sales, requiring time (and investment) to build back up.
- They get a grip on pricing power. Your pricing power will influence the margins you can maintain if tariffs are imposed on your market. Strong pricing power means consumers are less likely to opt for cheaper alternatives. Don’t opt for immediate discounting; constant promotions are often unsustainable.
- They make creative count. Take another look at how you present the value of your brand through your communications. If your competitor’s brand is produced overseas at a lower cost, it could harm their reputation.
- They find new space for their brand. Assess your brand and category to identify new markets or untapped needs where your brand might have an edge. Innovation may be needed for new variants or to stretch into new categories, if your brand is already well-established.
