Real World Outcomes – People: Affordability progress

The Jupiter Global Leaders strategy invests in economically resilient companies that align with the delivery of positive real-world outcomes for people and planet. A key focus for the investment process is how companies can contribute to economic development and growth, particularly in consideration of the increasing concern of affordability.

Individuals across economies face continued rising prices with the poorest often suffering the most, and affordability is increasingly being recognised as a broad, non-partisan, issue ¹. We see significant opportunities for companies to contribute, through their business models and strategies, to relieving cost of living pressures and in doing so play a role in supporting more equitable economic outcomes.

With inflation having run well above many central banks’ targets for a prolonged period, consumers have long reported cost of living pressures. In a recent YouGov survey the cost of living crisis topped the list of national concerns for Britons, with 44% of respondents saying they have struggled to pay for food in the last three months and 37% have struggled to pay energy bills over the same period². Household disposable incomes after housing costs have still not returned to pre-pandemic levels, and, for the poorest fifth of households, average income in 2023/2024 was at or below what it was 19 years ago³. In 2025 the Joseph Rowntree Foundation found that 69% of families that are using loans or credit cards to pay for food, housing (excluding mortgages) and essential bills were behind on their repayments⁴.   

Low income households (the bottom 40% of incomes) going without essentials in the UK

Source: Joseph Rowntree Foundation⁵

There is a similar trend in the US. A recent poll showed that over 50% of Americans find groceries difficult or very difficult to afford, with the number increasing into the mid to high 60% for those earning under $50,000 a year compared with 23% for those earning over $100,000². This issue bridges the political divide, making affordability a bipartisan political priority. The current inequality is further compounded by the fact that wage growth for bottom quartile earners is now slower than for those top quartile earners⁵, with lower earners feeling more likely to lose their jobs and find it harder to get a new one⁶.

% respondents saying they find grocery costs are...

The divergent economic experiences of different income groups are what is being described as a “k-shaped” economy, where the top 10% of earners are responsible for nearly 50% of spending in the US as their asset wealth grows⁷ but lower earners are increasingly under pressure. We anticipate that global affordability challenges will remain throughout 2026.

We see many opportunities for companies to contribute to relieving cost of living pressures across industries. Companies can adopt innovation strategies and business models that drive affordability for consumers in a way that underpins their long-term success and economic sustainability, as they are rewarded by customer loyalty and operational efficiencies.

In the rest of this article we will examine some specific case studies, all of which represent current holdings in the Jupiter Global Leaders strategy. Please note that all such company examples are for illustrative purposes only and are not a recommendation to buy or sell. 

Consumer benefits of operational efficiency

Costco ($428bn market cap, 341k employees) has a commitment to continually provide its customers with quality goods at the lowest possible prices.⁸ There are a number of key components to how Costco achieves operational efficiency that enables lower consumer prices:

Membership model – Costco has over 80 million paid members worldwide⁹,  receiving an annual fee per customer, which enables access to in store lower retail prices. The operational model of a membership programme has much lower costs than the retail business, which enables Costco to use the profits from these revenues to offset the impact of low sectoral gross margins.  The company’s customer base is loyal with renewal rates at circa 90%¹¹.

Mark up cap - Costco deliberately caps the amount it charges for the products it sells above what those products cost it, leaving it with a mark-up level considerably lower than that of the average of its close peers¹⁰.

Physical space efficiency– Costco’s no frills in-store experience, with many products being sold direct from pallet, achieves more than five times the sales per square foot ($/sqf) than the peer average¹¹.

Reduced Stock Keeping Units (SKUs) - having a smaller range of products – for example only stocking one brand of tomato ketchup – Costco is able to achieve favourable supplier pricing when sourcing SKUs as they order products in larger volumes, achieving economies of scale which they pass on to consumers while strengthening supplier relationships.

Many of these operational efficiencies also enable a nearly 70% lower carbon intensity than retail peers¹², providing lower carbon investment opportunity of a long-term economic tailwind with attractive durable returns.

Market-based CO2 emissions per $1m revenue generated

Logistics - cost and carbon efficiency

Logistics efficiencies can be highly meaningful across sectors. Old Dominion Freight Line ($37bn market cap, c22k employees) is a recognised leader in ‘less than truckload’ (LTL) shipping, where consignments from multiple shippers are aggregated into one truck, reducing underutilised space. The cost benefits of using LTL shipping are particularly felt for smaller loads, so are well suited for small businesses, as costs are spread across multiple clients.

Road freight is responsible for around 6% of global carbon emissions¹³, but is today a very challenging industry to decarbonise as low carbon technologies for Heavy Goods Vehicles (HGVs) are not readily available at scale. Through its own commitment to operational excellence, Old Dominion invested over $700m cumulatively in 2023 and 2024¹⁴ in upgrading its fleet to improve fuel efficiencies that supports both cost and carbon advantage. It also invests significantly in load and route optimisation to improve fuel usage and lower resultant emissions. As a result, it is regularly recognised in industry awards for its efficiency and contributions to reducing emissions in the sector¹⁵.

Our own analysis suggests that there can also be significant carbon emissions benefits in LTL shipping over full truckload (TL), as the trucks operate on average at a higher load factor and so LTL requires fewer trucks on the road to carry the same load the same distance with smaller vehicles. LTL trucks are also less likely to operate empty loads as they typically have higher route density on collection and delivery of consignments. While the industry is hard to decarbonise in absolute terms, the positive real world outcomes of LTL trucking both for costs and environmental impacts can be significant.

Essential services – supporting consumer outcomes

American Water Works ($26bn market cap, c7k employees) is a large US-based water utility operating across over twenty states, providing essential drinking and wastewater services to millions of households. Management targets keeping its bills to one percent or less of average household income. This compares to affordability thresholds of three percent and 4.5 percent used by the US Environmental Protection Agency (EPA) in 2024 when looking to establish the number of households in the US that experience high water cost burdens¹⁶.

Water bills as % of median household income

With affordability central to management’s approach the company is highly focused on operating efficiencies. In doing so, American Water Works is able to invest significantly in its network, including upgrading infrastructure to reduce leaks and improve water quality – both significant priorities in a country where the equivalent of over 50 million Olympic-sized swimming pools of water is lost in the system each year¹⁷ - while minimising the impact of those investments on its customers’ bills. In 2024 the company replaced 0.8% of its water mains, resulting in a replacement rate of 125 years which compares against an industry average of nearly 200 years¹⁸. Between 2026 and 2035 the company will invest $46bn-$48bn in capital expenditures¹⁹, with key priorities of infrastructure renewal, resiliency and water quality.

Alongside this American Water Works maintains specific tariffs and grants for low-income households, which in 2024 together reached over 74,000 and 43,000 customers respectively²⁰. With a strong focus on upgrading water quality and availability at the same time as keeping bills low, the company is viewed positively by regulators and broader stakeholders leading to high quality, regulated returns for its shareowners.

Consumer product – research and development opportunity

While evidence on the extent to which consumers will pay for household products with sustainability advantages is mixed, we focus our investment approach on companies that focus their R&D efforts on products and services that can support product quality, brand strength and customer loyalty.  Conviction is driven by the tangible benefits of the research and development outcomes, supporting long term competitiveness.

For example, Unilever’s ($140bn market cap, c125k employees) brand Persil has developed its Wonder Wash range of washing detergents which are specifically designed for short, cold clothes washes. The result is that in testing Wonder Wash can help consumers reduce their water use per wash by 30% and their energy use per wash by 60% when compared against longer cycles²⁰. This helps to save costs when using an energy intensive device that can be responsible for 4% of household electricity consumption^21. The increased convenience of short-cycle washing detergents makes them a particularly high growth product set, with Unilever previously estimating it to be growing 21% annually²² - well ahead of the wider category and supporting the company’s growth profile.

A strategy underpinned by financial resilience and real-world outcomes

The Global Leaders strategy aims to identify profitable, well capitalised companies capable of compounding growth over the long term.

Long termism is a key characteristic of our portfolio, across balance sheets, cash generation and competitive positioning. Companies maintaining advantage with a focus on affordability and innovation are attractive investment opportunities, in our view; providing access to long term strategic business models, supporting customer retention and by extension future earnings.

With a ten-year investment horizon, long term structural growth opportunities drive conviction and portfolio construction. The team views the need for leading initiatives in affordability as an attractive area for investment, with tangible positive real world outcomes across people and planet.

Footnotes

¹POLITICO - New Poll Paints a Grim Picture of a Nation Under Financial Strain

²YouGov - Britons and the Cost of Living, January 2026

³Joseph Rowntree Foundation - A Decade of Falling Incomes? JRF's Pre-Budget Assessment of Living Standards

⁴Joseph Rowntree Foundation - No Let-Up for Millions of Families in Hardship: JRF’s Cost of Living Tracker, Winter 2025

⁵Federal Reserve Bank of Atlanta - Wage Growth Tracker

⁶Federal Reserve Bank of New York - Survey of Consumer Expectations

⁷USA Today - Rich People are Driving US spending. Everyone Else is Cutting Corners

⁸Costco - Our Mission

⁹Costco - 1st Quarter FY 2026 Supplemental Information

¹⁰Costco’s 5 year average mark-up is 12.2%, compared with the peer group average over the same period of 40.9%

¹¹Costco’s 5 year average sales per square foot of space of $1,944 compares with the peer group average over the same period of $366

¹²Costco’s 5 year average market-based tCO2 emissions per $1m in revenue generated from its retail operations of 12.8 compares with the peer group average over the same period of 37.6. The average used is from the years 2020 to 2024 as not all companies had reported 2025 data at the time of writing.

¹³Our World in Data - Cars, planes, trains: where do CO₂ emissions from transport come from?

¹⁴ Old Dominion Freight Line - 2024 Sustainability Report

¹⁵For example, receiving the Heavy Duty Trucking’s Top Green Fleet award in 2024.

¹⁶US EPA - Water Affordability Needs Assessment

¹⁷ASCE - 2025 Report Card for America's Infrastructure: Drinking Water

¹⁸American Water Works - 2024 Sustainability Report

¹⁹ American Water Works - Q3 2025 Results

²⁰ Unilever - Unilever and Samsung Explore the Future of Laundry

²¹Eon - How to Save Energy with Laundry

²²Unilever - Revolutionising Liquid Laundry Detergents for Short Cycles

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