Half of consumers have cut back on non-essential spending so far this year

12 April 2024 , 08:19

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Consumers are cutting back on dining out, according to a new survey (Image: No credit)

Half of consumers have tightened their belts on non-essential spending in the first quarter of this year, with dining out being the first to be axed from budgets, a survey suggests.

Just 3% of consumers claim they've spent more on non-essentials in the first quarter, while 52% have cut back, according to the KPMG Consumer Pulse survey. Dining out was the most common discretionary spending cut, listed by 72% of those who are tightening their belts, followed by clothing purchases (62%) and takeaways (58%).

When quizzed about what they'd likely do if prices of goods and services dropped, 47% said they would put their money away into savings and 20% said they would allocate money towards essential costs such as mortgage or rent, energy, fuel and food.

Only 11% said they would ramp up their non-essential spending. Consumers are persistently tweaking their purchasing behaviour to save pennies, with 38% opting for more own-brand over the first three months of the years, 37% buying more promotional or discounted items, and 35% buying fewer items.

Booking or taking a holiday was the most common big ticket purchase in the last three months, for a quarter of consumers, while 35% also said that they would be splashing out on a holiday during the remainder of 2024. One in 10 revealed they had undertaken home improvements so far this year, with an additional quarter of consumers saying they will be doing so by the end of the year.

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A quarter of shoppers have declared they won't be dipping into their savings this year, while the same proportion admit they're already using their nest eggs to cover essential outgoings. KPMG's consumer markets guru Linda Ellett 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."

"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."

The findings come from a One Poll survey of 3,000 UK consumers conducted between March 13-19.

Lawrence Matheson