Discretionary spending hit as household cost pressures continue to mount – London Business News | Londonlovesbusiness.com

Four in ten consumers say they’ve cut back on non-essential spending, reducing their monthly discretionary budget by £77 on average compared to the start of the year, according to KPMG’s quarterly Consumer Pulse.

The latest figures from the survey of 3000 people across UK regions shine a light on consumer behaviour and sentiment with nearly half of 2024 gone, and as the country heads into the final weeks before the general election.

The scale of essential cost pressures has even seen 5% of consumers reporting that they have reduced their monthly non-essential spending by over £200 compared to when 2024 began.  On average, those aged 25 to 34 say they’ve made the highest monthly cut to their discretionary spending.

The findings also show the divide that household cost pressures are having on consumer confidence. A quarter of consumers feel less secure about their financial circumstances than when the year began, but a quarter feel more secure.

Linda Ellett, UK Head of Consumer, Retail and Leisure for KPMG, said: “Our research clearly indicates that many households have had to continue to find ways to cut non-essential spend so far this year, with some making sizeable cuts as they adapt to or prepare for significant cost hikes, such as a remortgage or rent increase.

“Slowing inflation does not mean that consumers are seeing a reduction in prices and costs, and the overall squeeze on many monthly budgets continues.

“Consumers are cutting back spend through seeking out cheaper brands or promotional offers, buying fewer items, and by restricting the everyday treats such as eating out.