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      The findings come from KPMG UK’s quarterly Consumer Pulse survey, which asked 3000 UK consumers in March about their financial confidence and spending over the last three months*.

      Macroeconomic concern

      Confidence in the UK economy fell, with 62% of consumers saying it is worsening (up from 58% the previous quarter). Only one in ten said the economy is improving (10%).

      Across all age groups, grocery costs remain the number one reason for (85% of) those saying the economy is worsening, followed closely by utilities cost concern - which jumped nine percentage points (from 75% to 84%) in a quarter. Utilities cost concern is the number one reason for those aged 25 to 54 to say the economy is worsening. 

      Half of people (49%) who think the economy is worsening report cutting spending as a consequence, with 40% deferring big ticket purchases (rising from 34% three months ago). 

      Financial security drops slightly

      Despite the downbeat opinion about the trajectory of the UK economy, the majority (54%) of the 3000 consumers surveyed reported feeling secure in their financial situation (down from 56%) – while those feeling financially insecure grew slightly (rising three percentage points to 25%).

      Reflecting on the findings, Linda Ellett, Head of Consumer, Retail and Leisure for KPMG UK, said: “Considering the backdrop of the ongoing conflict in the Middle East, and the actual and potential impact on energy and grocery prices, it is not a surprise that we are seeing heightened consumer concern about the economic health of the UK.

      “While there are relatively healthy signs of day to day spending activity so far this year, a growing number of people say they are deferring larger item spending due to their concern about the economy. The number of people feeling insecure about their financial situation has slightly grown in the last quarter, but the majority of people currently remain secure. That scale of security may be tested in the coming months, depending on how much costs increase by and for how long.”

      If people were to be convinced that the economy is improving, a third (28%) say they would increase their discretionary spending, and a quarter (24%) would make more big-ticket purchases.

      Q1 spending

      Price remains the number one purchasing driver for everyday items, rising (to 71%) to a level not seen for a year. Price savvy consumers reported increases in:

      • Using loyalty schemes more to access lower prices (up two percentage points from last quarter).
      • Buying more value or own brand goods (up three percentage points).
      • Buying lower cost brands (up two percentage points).
      • Shopping at lower cost retailers (up one percentage point).

      Day-to-day spending has remained resilient through the first quarter. Consumers reported spending more on eating out (up seven percentage points) and takeaway (up five percentage points) in Q1 (which included the Christmas period) to the previous quarter. So far this year, six in ten people say they have eaten out in a restaurant, 39% went out for an alcoholic drink, and just under half (47%) said they had takeaway.

      The most common big-ticket spend in the quarter, for a fifth (22%) of those polled, was on a holiday (or booking). But the largest number of consumers (47%) are yet to make a big-ticket purchase in 2026.

      Linda Ellett added: “The cautious consumer landscape continues, with essential cost levels and economic concern driving an increased focus on price and promotions. Loyalty scheme use and own brand buying continues to grow. Larger discretionary spend is being prioritised toward holidays and experiences, but there are still relatively healthy signs so far this year of day-to-day spending activity – albeit consumer, retail and leisure brands are having to compete in a landscape of squeezed consumer budgets and rising business costs.”

      Linda Ellett
      Linda Ellett

      Head of Consumer, Retail & Leisure

      KPMG in the UK

      -ENDS-

       

      Q1 2026 Consumer Pulse results:

      *The latest Consumer Pulse survey tracks Q1 during Feb/Jan/Dec vs Q4 during Sept/Oct/Nov.

      One Poll, a member of the British Polling Council, surveyed UK consumers online between March 5 and 16 for KPMG UK. The questions posed were as follows:

      Thinking about your monthly essential costs (i.e. mortgage/rent, utilities, fuel, food, medicine, etc.) and your remaining discretionary spending budget (including savings), how secure or insecure do you currently feel about your financial security?

      • 54% Secure (Q4 2025: 56%)
      • 20%: Neither secure nor insecure (Q4 2025: 20%)
      • 25% Insecure (Q4 2025: 22%)
      • 1%: Prefer not to say

      Which, if any, of the following best describes your current financial situation? 

      • 10%: Confident - I am able to spend freely each month on whatever I choose
      • 37%: Comfortable - I able to spend freely each month, but have to plan larger purchases
      • 33%: Managing - I budget discretionary spending each month
      • 16%: Impacted – I am having to limit or cut discretionary spend to pay for essential costs
      • 3%: Troubled – I am unable to pay essential bills or incurring debt in order to do so
      • Prefer not to say: 1%

      Do you think the health of the UK economy of currently improving or worsening?

      • 62%: Worsening (Q4 2025: 58%)
      • 20%: Staying the same (Q4 2025: 22%)
      • 10%: Improving (Q4 2025: 13%)
      • Not sure: 8%

      To those selecting ‘worsening’: What is currently making you feel that the UK economy is worsening? [Select all that apply]

      • 85%: The cost of groceries.
      • 84%: The cost of household utilities
      • 52%: The cost of eating or drinking out
      • 45%: Your general perception based upon the state of public services where you live
      • 33%: Your general perception based upon what you read/hear in media/social media
      • 22%: Your general perception based upon what friends and family tell you
      • 22%: Your rent or mortgage cost has recently risen
      • 16% You thought interest rates would fall by more than they currently have
      • 14%: Your job feels more at risk
      • 10%: You’re finding it harder to secure work / business
      • 5%: Your fixed-term mortgage deal ends soon, and a new deal will cost more
      • 5%: Other
      • Not sure: 1%.

      To those selecting ‘worsening’: Which, if any, of the following is your perception about the current health of the UK economy making you do? [Select all that apply]

      • 50%: Reduce monthly spending on everyday items
      • 40%: Defer making big ticket purchases
      • 39%: Save more as a contingency
      • 17%: Be less inclined to leave your current employment
      • 18%: None of the above

      To those saying the economy is worsening or staying the same: If you felt that the economy was improving, which, if any, of the following would you do? [select all that apply] 

      • 28%: Increase monthly spend on everyday items 
      • 24%: Make more big-ticket purchases 
      • 13%: Save less as a contingency 
      • 9%: Feel more inclined to leave your current employment 
      • None of the above: 47% 

      Which, if any, of the following have you done so far in 2026? [select all that apply] 

      • 59%: Eaten out – restaurant 
      • 54%: Drunk out – coffee or soft drinks 
      • 47%: Eaten out – fast food 
      • 47%: Ordered takeaway food at home 
      • 39%: Drunk out – alcohol 
      • 34%: Booked a holiday 
      • 29%: Watched a movie at the cinema 
      • 24%: Been to the gym or a fitness class 
      • 20%: Been to a gig or the theatre 
      • 18%: Used beauty services (e.g. manicure or massage etc.) 
      • 18%: Been on a holiday 
      • None of the above: 9% 

      Comparing your monthly discretionary spending over the past three months (Feb, Jan, Dec) to the three months previous (Sept, Oct, Nov), which, if any, of the following have you been spending LESS or MORE on? [Select all that apply]

      • Eating out: Less 34% / More 10%
      • Takeaway food: Less 30% / More 7%
      • Clothes & footwear: Less 31% / More 9%
      • Drinking out: Less 25% / More 6%
      • Live entertainment (e.g. cinema, gig, theatre tickets): Less 20% / More 6%
      • Groceries: Less 21% / More 32%
      • Beauty products (e.g. make-up): Less 15% / More 4%
      • Beauty services (e.g. pedicure): Less 12% / More 4%
      • Recreational (non-commuting) vehicle / public transport use: Less 11% / More 5%
      • TV (Satellite, cable, streaming) or Music services: Less 12% / More 8%
      • Gym or fitness classes: Less 9% / More 6%
      • Health services (e.g. massage): Less 9% / More 5%
      • Health products (e.g. vitamins or protein powder): Less 10% / More 9%
      • Mobile phone contract: Less 8% / More 8%
      • Children’s clothing and accessories: Less 7% / More 6%
      • Pet food and products: Less 6% / More 9%
      • None of the above: Less 30% / More 26%

      Comparing when you were shopping over the past three months (Feb, Jan, Dec) to the three months previous (Sept, Oct, Nov), which, if any, of the following did you do LESS or MORE of? [Select all that apply]

      • Buying full-price branded produce: Less 18% / More 5%
      • Shopping online: Less 21% / More 15%
      • Shopping in-store: Less 13% / More 16%
      • Using credit card(s) when making purchases: Less 10% / More 12%
      • Buying own brand / value products: Less 8% / More 22%
      • Using buy now pay later when making purchase: Less 8% / More 7%
      • Buying lower-cost branded produce: Less 7% / More 19%
      • Buying promotional or discounted items: Less 7% / More 24%
      • Shopping at a lower-cost retailer: Less 7% / More 19%
      • Buying products/services due to their sustainable or ethical credentials: Less 7%/More 5%
      • Using retailer loyalty schemes to get lower prices: Less 7% / More 24%
      • Buying pre-owned goods: Less 7% / More 12%
      • None of the above: Less 36% / More 9%

      In the past three months which, if any, of the following ‘big ticket’ items have you spent money on? [Select all that apply]

      • 22%: Holiday(s)
      • 11%: Minor home improvements (e.g. painting of one room)
      • 10%: Home appliances (e.g. fridge or washing machine)
      • 10%: Personal technology (e.g. a computer or smart watch)
      • 9%: Mobile phone
      • 8%: Home electronics (e.g. TV or sound system)
      • 8%: Furniture (e.g. a sofa or dining table)
      • 7%: Major improvements (e.g. extension or wide-scale redecorating) to your current home
      • 4%: A used car
      • 4%: A brand-new car
      • 3%: Moved home
      • None of the above: 47%

      In the next three months which, if any, of the following ‘big ticket’ items do you plan to spend money on? [Select all that apply]

      • 33%: Holiday(s)
      • 19%: Minor home improvements (e.g. painting of one room)
      • 10%: Major improvements (e.g. extension or wide-scale redecorating) to your current home
      • 9%: Personal technology (e.g. a computer or smart watch)
      • 8%: Mobile phone
      • 8%: Furniture (e.g. a sofa or dining table)
      • 7%: Home appliances (e.g. fridge or washing machine)
      • 6%: Home electronics (e.g. TV or sound system)
      • 4%: A brand-new car
      • 3%: A used car
      • 2%: Moving home
      • None of the above: 39%

      Over the past three months, which, if any, of the following have been your top purchasing drivers when buying everyday items? [Select up to three]

      • 71%: Price
      • 49%: Quality
      • 29%: Convenience
      • 23%: Loyalty benefits
      • 14%: Health benefits
      • 9%: Customer experience
      • 8%: Environmental sustainability
      • 5%: Data privacy
      • 3%: Other ethical considerations
      • None of the above: 3%

      Over the past three months, which, if any, of the following have been your top purchasing drivers when buying one-off larger purchases? [Select up to three]

      • 53%: Price
      • 42%: Quality
      • 17%: Convenience
      • 12%: Customer experience
      • 12%: Loyalty benefits
      • 9%: Environmental sustainability
      • 8%: Health benefits
      • 5%: Data privacy
      • 3%: Other ethical considerations
      • None of the above: 11%

       

      The previous quarter’s Consumer Pulse press release can be found here.

       

      For media enquiries, please contact:

      Steven Reilly-Hii, Media Relations Manager (Consumer and Retail), KPMG UK, steven.reilly-hii@kpmg.co.uk

       

      About KPMG in the UK:

      KPMG is trusted to make the difference for our clients, people and the communities we work in. With our people’s deep sector expertise and cutting-edge technology, we help organisations overcome their biggest challenges and unlock new opportunities to transform and grow.

      On 1 October 2024, KPMG UK and KPMG Switzerland merged to form KPMG UK/Swiss Group, scaling our strengths and amplifying the difference we make.

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