Many consumers have taken cost-cutting steps to balance their budget and are now maintaining that even after the pressure eased, a recent report has shown.
New research released by KPMG offers insight into whether consumers would reduce some of the buying and saving behaviours that have become more prevalent during the cost-of-living crisis if they had more disposable income available to spend.
KPMG UK’s Consumer Pulse survey gauged the quarterly confidence and buying behaviour of 3,000 consumers across regions, ages and income groups during September.
As with previous surveys, many of the changes to buying behaviour that have been increased by the cost-of-living crisis were again prevalent – including a quarter of consumers saying they have shopped at lower-cost retailers more this year compared to last, and a third saying that they’ve increased their own-label, value and loyalty goods buying as 2024 has progressed.
Posed with the scenario that their household essential costs ease, increasing their discretionary spending budget, less than one in ten consumers said they would:
- Buy less own-label / value produce (9 per cent).
- Shop less at discounters / lower-price stores (9 per cent).
- Buy less promotional / discounted goods (6 per cent).
- Use retailer loyalty schemes less (6 per cent).
Two-thirds of consumers said that they would save any extra funds. While 14 per cent said they would buy more sustainable or ethical produce, and 12 per cent said they would increase their branded goods buying.
So far this year, household essential cost levels have led half of consumers to cut their non-essential spending, saying they have reduced their average monthly spend by £72 on average compared to January. Most of the rest of consumers polled reported spending at the same level as when 2023 ended.
Linda Ellett, KPMG UK’s head of consumer, retail and leisure, commented, “As household cost pressures have ramped up over recent years, many consumers have been forced to adapt their budget – cutting discretionary spending and finding savings on their essential costs where possible. Market share for lower-price retailers has grown, as has the amount of people trading down to own brand and value goods and actively searching for offers.
“Many consumers have taken cost-cutting steps to balance their budget and are now maintaining that, but as thousands of householders come out of their mortgage fix and have to enter higher-cost deals, consumers are still cutting spend elsewhere in order to adjust. This is reflected in half of consumers telling us that they’ve cut non-essential spend so far this year, and one in three saying they are using even more cost-cutting tactics when shopping.
“Many of these behaviours when shopping are so instilled now in many of us, that even when posed with the scenario that essential costs ease, providing more cash in the pocket, few would reduce their cost-cutting buying behaviours. Consumers instead are far more likely to save any extra cash.
“This landscape of heightened price-point buying, promotional demand, and increased savings volumes continues to pose a variety of questions for retailers and for the economy generally regarding whether spending taps will be turned beyond a gradual drip.”
