New research released today by KPMG provides 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 3000 UK 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-brand, value and loyalty goods buying as 2024 has progressed.
KPMG was keen to explore whether consumers would still continue the same actions, even if the pressure on their essential costs eased in the months and years to come.
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 brand / value produce (9%).
- shop less at discounter / lower price stores (9%).
- buy less promotional / discounted goods (6%).
- use retailer loyalty schemes less (6%).
Two-thirds of consumers said that they would save any extra funds. While 14% said they would buy more sustainable or ethical produce, and 12% 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.
Commenting on the findings, Linda Ellett, KPMG UK’s head of consumer, retail and leisure, said: “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.”
Buying at lower cost is also likely a key factor that is driving a fifth of consumers to say that they have bought more pre-owned goods so far this year. The popularity of the circular economy doubles (to 33%) amongst those aged 18-24, and across all age groups females are twice as likely to say they are buying more pre-owned goods this year than males.
Amongst those spending disposable income, travel is the most common way that consumers say they have treated themselves so far this year, and the most popular choice for big ticket spending in the remainder of the year. A third of consumers report having taken a holiday in 2024.
