Half of UK consumers say they have cut non-essential spend so far in 2024

KPMG UK's Consumer Pulse surveys 3000 consumers about Q1

KPMG UK's Consumer Pulse surveys 3000 consumers about Q1

Headline findings from KPMG UK’s Consumer Pulse survey for the first quarter of 2024:

  • 52% of consumers say they have had to cut their non-essential spending.
  • Only 3% say they’ve been able to spend more on non-essentials.
  • Eating out is the most common (72%) discretionary spending cut.
  • Four in 10 shoppers say they are buying more own brand / value produce.
  • Over a third (36%) of consumers say they are using loyalty schemes more.
  • One in ten say they have switched insurer, and mobile phone provider.
  • A quarter of consumers say they’ve booked or taken a holiday.
  • Four times more (47%) consumers would put money into savings than spend it on non-essentials (11%) if prices of goods or services drop.  A fifth would use it for essential costs.

Half of consumers say they have cut non-essential spend in the first quarter of the year and consumers are four times more likely to save than spend, according to new research from KPMG UK.

KPMG UK’s Consumer Pulse survey tracks the quarterly confidence and spending behaviour of 3000 consumers across age and income groups and UK regions.  Half of respondents said that their essential cost levels have meant that they have had to cut their non-essential spend in the first quarter of the year.  Eating out (72%), clothing (62%), and takeaways (58%) were the three most common non-essential cutbacks reported.  Regionally, cutting non-essential spend was highest in London, at nearly two-thirds (58%).

However, four in 10 consumers across the UK reported that their non-essential spending levels so far this year have remained the same as when 2023 ended – but only 3% of consumers said that they had been able to spend more money on non-essentials in the first quarter.

When asked what they would most likely do should prices of goods and services drop:

  • 47% said put the money into savings
  • 20% said put the money toward essential costs (mortgage/rent, energy, fuel, food)
  • 11% said increase non-essential spending
  • 14% weren’t sure.  And 8% said none of the above

Responding to the findings, Linda Ellett, UK Head of Consumer, Retail and Leisure for KPMG, said:

“Essential costs remain at a level where nearly half of the consumers we surveyed said they have cut their non-essential spend in the first quarter of the year.  Most of the remainder are spending at the same level as they were at the end of last year, but only 3% said they’ve been able to increase their discretionary spending.

“Should macroeconomic conditions lead to an easing of pressure on household budgets, then four times more consumers say they would boost or replenish their savings, rather than spend more on non-essentials.  If true, it raises significant questions about whether taming inflation leads to a consumer spending boom, or just a rebuilding of savings balances that some consumers have used to offset, or totally pay for, the higher cost of essentials over recent years.”

Despite more than half of consumers having cut their non-essential spend, the research showed the ways in which people are still managing to treat themselves so far in 2024.  Chocolate, desserts or sweets at home were the most common outlet (for a third of people), while a coffee when out and about is second (for a quarter of people).  Despite being the third most common non-essential spending cut – having a takeaway at home is still the third most common way people are treating themselves.

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As was the case throughout 2023, KPMG UK’s research shows consumers continuing to adapt their buying behaviour to save money.  In the first three months of 2024 this includes.

  • 38% buying more own brand / value items (rising to 46% in the North East)
  • 37% buying more promotional / discount items (rising to 42% in South East England)
  • 36% using loyalty schemes more (rising to 42% in the East of England)
  • 35% buying fewer items (rising to 40% in Wales)
  • 27% shopping at lower cost retailers (rising to 30% in the West Midlands)
  • 18% buying more pre-owned goods (highest amongst those aged 18-24, at 31%)

When asked about what brands they were switching on to save money, consumers most commonly said on frozen food (24%), followed by fresh produce (fruit, vegetables, meat, bread, dairy), and clothing. 

Other brand category switches in the first quarter of 2024 include:

  • 11% Insurance
  • 9% Mobile
  • 7% Broadband
  • 7% TV/music streaming
  • 6% Satellite/Cable
  • 6% Energy provider

A quarter of consumers said that grocery was the sector that made them feel most valued as a customer.

Linda Ellett added: “Half of the consumers we surveyed say they have reduced their non-essential spend since 2024 began, with sizeable groups of consumers also taking a variety of steps when shopping to save money – ranging from more own-brand buying, to promo, pre-used, and brand switches. 

“A third of people say they have used loyalty schemes more so far this year – which is little surprise, as shoppers search for best prices.  It’s also a reflection of the hard work that retailers have put into being competitive on pricing, despite their own cost pressures. The grocery sector’s loyalty focus is reflected in consumers most commonly saying grocery is the area of the economy they feel most valued by. Price and loyalty benefit continue to drive custom and are a clear indication of the importance of retailers continuing to offer promotions where possible.”

Taking or a booking a holiday was the most common big ticket purchase in the last three months, for a quarter of consumers.  35% also said that they would be spending money on a holiday during the remainder of 2024.

One in 10 said they have carried out home improvements so far this year, with a further quarter of consumers saying they will be doing so by the end of the year.  But spending on other big ticket items so far in 2024 was limited, as is the intention to spend on big ticket items over the next nine months.

A quarter of consumers said that they don’t plan to spend any of their savings this year.  A quarter also said that they are currently using their savings to help meet their essential costs.

Notes to Editors:

3000 consumers of varying ages, regions and income groups were polled for KPMG UK by One Poll from March 13 to 19.  One Poll are members of the British Polling Council.  Questions posed were as follows:

How are your essential costs (e.g., mortgage/rent, energy, fuel, food) affecting the rest of your spending so far in 2024, compared to when 2023 ended?

  • I have been able to increase my non-essential spending: 3%
  • My non-essential spending levels remain the same: 41%
  • I have had to cut back my non-essential spending: 52%
  • Not sure: 3%

To 1560 people who selected cut-back spending: Since 2024 began, which of the following non-essential spends have you reduced your spending on? [Select all that apply]

  • Eating out: 72%
  • Clothing: 62%
  • Takeaway: 58%
  • Leisure Travel / Holiday(s): 44%
  • Food and drink shopping: 44%
  • Home improvements: 37%
  • Experiences: 36%
  • Beauty products and services: 34%
  • TV or music streaming services: 27%
  • Technology: 23%
  • Fitness and exercise: 16%
  • Non-commuting vehicle/transport use: 16%
  • Meal delivery kits: 14%
  • Children’s clothing and toys: 10%
  • Pet products: 8%
  • None of the above: 1%

Which, if any, of the following have you done more of when shopping so far in 2024, compared to 2023? [Select all that apply]

  • Buying own brand / value products: 38%
  • Buying promotional or discounted items: 37%
  • Making use of retailer loyalty schemes to get lower prices: 36%
  • Buying fewer items: 35%
  • Buying lower price branded produce: 32%
  • Shopping at less expensive retailers: 27%
  • Shopping at multiple stores to find products at their lowest cost: 26%
  • Buying pre-owned items: 18%
  • Cancelling monthly subscriptions: 17%
  • Use savings when making purchases: 16%
  • Switch products due to quantity shrinking but price remaining the same (shrinkflation): 15%
  • Shopping in-store rather than online: 14%
  • Use credit card(s) when making purchases: 14%
  • Shopping online rather than in-store: 12%
  • Choosing lower cost monthly subscriptions: 9%
  • Use buy now pay later when making purchases: 8%
  • Buying products or services due to their sustainable or ethical credentials: 6%
  • None of the above: 19%

Have you switched to a cheaper brand in any of the following categories so far in 2024 to save money? [Select all that apply]

  • Frozen food: 24%
  • Fresh produce (fruit, vegetables, meat, bread, dairy): 22%
  • Clothing: 17%
  • Eating Out: 14%
  • Non-perishables: 13%
  • Alcohol: 12%
  • Insurance cover: 11%
  • Beauty products & services: 11%
  • Mobile phone contract: 9%
  • Takeaways: 9%
  • Broadband provider: 7%
  • TV & music streaming services: 7%
  • Travel/Holiday: 7%
  • Pet products: 7%
  • Energy provider: 6%
  • Satellite or cable TV provider: 6%
  • Home improvements: 5%
  • Children’s clothes & toys: 4%
  • Technology: 4%
  • Fitness & exercise: 4%
  • Vehicle: 3%
  • Meal delivery kits: 3%
  • Other: 1%
  • None of the above: 37%

So far this year, what are the most common ways in which you have ‘treated yourself’? [Select up to five]

  • Chocolate, dessert or sweets at home: 31%
  • A coffee out: 25%
  • Takeaway at home: 25%
  • Sit-down meal out: 24%
  • Alcoholic drink at home: 24%
  • Holiday / weekend break: 18%
  • Alcoholic drink out: 15%
  • Clothing and footwear: 15%
  • Fast food: 14%
  • Out of home entertainment (e.g., cinema, gig, theatre, etc.): 13%
  • N/A – I have not been able to treat myself so far this year: 10%
  • Make-up or skin care: 9%
  • Premium range meal at home: 8%
  • Beauty services (e.g., manicure, massage, etc.): 8%
  • Toiletries: 6%
  • Jewellery and accessories: 4%
  • None of the above: 5%

Considering your favourite brand/ retailer in each of the following categories, which make you feel most valued as a customer? [Select up to three]

Top three: Grocery 24%.  Restaurant 11%.  Leisure travel/holidays 9%

Have you bought any of the following ‘big ticket’ items so far in 2024? [Select all that apply]

  • Holiday(s) (including booked but not yet taken): 25%
  • Home improvements (e.g., redecorated): 10%
  • Home appliances (e.g., fridge): 10%
  • Personal technology (e.g., mobile phone, laptop): 9%
  • A petrol or diesel vehicle: 6%
  • Home electronics (e.g., TV): 6%
  • A battery electric vehicle: 3%
  • A home: 3%
  • None of the above: 54%

How much money do you have available to you in savings, equivalent to your monthly income? [Select best match]

  • 'Less than a month’s income: 13%
  • '1-3 months’ income: 16%
  • '3-6 months’ income: 15%
  • '6-12 month’s income: 9%
  • 'Over 12 months’ income: 25%
  • 'N/A – I don’t have any savings: 8%
  • 'Prefer not to say: 13%

To 2754 people with savings: Are you currently having to use your savings to help meet your essential household costs (e.g., food, energy, fuel, mortgage/rent)?

  • Yes: 26%
  • No: 74%

To 2754 people with savings: Which, if any, of the following do you plan on spending savings on in the rest of 2024? [Select all that apply]

  • Holiday(s): 35%
  • Home improvements: 24%
  • Paying essential household costs (e.g., food, energy, fuel, mortgage/rent): 16%
  • Home appliances: 7%
  • Technology (such as mobile phone): 7%
  • Moving home: 6%
  • A petrol or diesel vehicle: 6%
  • Paying down the existing mortgage: 6%
  • Home electronics: 5%
  • A battery electric vehicle: 3%
  • Not sure: 13%
  • N/A – I don’t plan to spend any of my savings in 2024: 23%

What is your biggest deterrent to spending more on non-essential goods and services in the next three months? [Select one]

  • Utilities (gas, electricity, water) costs: 24%
  • Food and drink cost: 12%
  • No savings: 8%
  • Current mortgage cost: 6%
  • Current rent cost: 5%
  • Saving for higher mortgage cost when fixed term deal ends: 3%
  • Saving in case of further rent increases: 3%
  • Transport/vehicle cost: 3%
  • Childcare cost: 2%
  • None of the above: 33%

So far in 2024, what has been your top consideration when purchasing goods and services? [Select one]

  • Price: 58%
  • Quality: 19%
  • Convenience: 4%
  • Loyalty benefits: 4%
  • Environmental sustainability: 3%
  • Customer experience: 2%
  • Data privacy: 1%
  • Other ethical considerations: 1%
  • Other: 1%
  • Not sure: 7%

Other than price, what have been your top considerations when purchasing goods and services so far in 2024? [Select up to three]

  • Quality: 66%
  • Convenience: 39%
  • Loyalty benefits: 30%
  • Customer experience: 18%
  • Environmental sustainability: 15%
  • Data privacy: 6%
  • Other ethical considerations: 6%
  • Other: 2%
  • Not sure: 8%

If prices of the goods and services that you currently buy were to decrease as inflation drops, which, if any, of the following would you be most likely to do? [Select one]

  • Put the money into savings: 47%
  • Put any money saved towards essential costs: 20%
  • Increase your non-essential spending: 11%
  • None of the above: 8%
  • Not sure: 14%

For media enquiries, please contact:

Steven Reilly-Hii, Media Relations Manager, KPMG LLP, E: steven.reilly-hii@kpmg.co.uk , T: 07510 376635.

About KPMG UK: 

KPMG LLP, a UK limited liability partnership, operates from 20 offices across the UK with approximately 18,000 partners and staff. The UK firm recorded a revenue of £2.96 billion in the year ended 30 September 2023.  

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 143 countries and territories with more than 273,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.