European Consumer Sentiment in Early 2025: Economic Caution and Spending Insights
As the first quarter of 2025 unfolds, consumers across Europe are exhibiting a cautious stance towards their economic circumstances. According to recent findings from ConsumerWise research, while households have maintained their income, savings, and spending habits from the preceding quarter, a notable mix of optimism and pessimism characterizes consumer sentiment.
Economic Outlook: A Mixed Landscape
The research indicates that approximately half of European consumers harbor mixed feelings about their financial outlook. Specifically:
- About 25% of consumers expressed optimism regarding the economy, approximately the same number felt pessimistic.
- Country-specific differences highlighted that French consumers reported the highest level of pessimism at 32%, whereas Spanish consumers demonstrated the most optimism, also at 32%.
Key Consumer Concerns
When asked about their primary worries, consumers identified rising prices and inflation as their foremost concerns. However, there was a slight decline in the number of consumers citing these issues, dropping from 56% in Q1 2024 to 47% in Q1 2025. Other significant concerns included:
- Immigration
- Climate change
- International conflicts
Financial Stability and Spending Behavior
Despite these concerns, 61% of surveyed Europeans reported that their income remained stable compared to the previous three months. Meanwhile, 38% indicated an increase in spending, and 43% noted a decrease in savings. These trends echo sentiments from the end of 2024.
Spending Intentions by Category
Reflecting seasonal spending behaviors, consumers indicated intentions to reduce expenditure in several discretionary categories. Notable trends include:
- Decrease in spending on food delivery apps, entertainment, and dining out.
- Increased anticipated spending on home and gardening products, aligning with seasonal changes.
Travel Spending Insights
Consumer intentions regarding travel have evolved positively compared to the prior year, with significant regional variations:
- Spanish consumers showed a preference for increased spending on cruises and hotel bookings.
- French and Italian consumers expressed a desire to invest more in international flights.
- Conversely, German consumers anticipated increased domestic travel expenditures but showed a 10-point drop in intent to spend on international flights.
- Interestingly, UK consumers reported a noted decrease in travel-related spending intentions.
Splurging Trends Across Age Groups
Approximately one-third of European consumers plan to indulge in splurges over the next three months, with this figure rising to 43% in Germany. Noteworthy differences exist in spending categories based on age demographics:
- Older consumers are inclined to splurge on travel and dining experiences.
- Younger consumers show a preference for apparel and fashion items.
This shift towards experiences over material goods can be attributed to lifestyle changes and evolving consumer priorities, particularly among wealthier older demographics.
Looking Ahead
As 2025 progresses, evolving political landscapes—including the outcomes of elections in Germany, along with issues related to international relations and tariffs—are anticipated to influence consumer confidence and spending behaviors across these five nations. For ongoing insights and detailed analysis, feel free to reach out to our ConsumerWise team.
