Four in 10 consumers are heading into 2024 saying they feel less financially secure than when 2023 began, a new report has stated, adding that hose feeling worse about their financial security adapted their shopping behaviour to lower their costs during 2023 and are going to continue these steps during the next twelve months
KPMG’s latest Consumer Pulse survey of 3000 UK consumers shows those feeling worse about their financial security outnumber those feeling more secure by almost two to one (41 per cent vs 22 per cent).
Compared to a year ago, the 2024 survey also shows clear jumps in the number of people saying that they will buy more own brand and value produce next year (46 per cent vs 31 per cent), and more promotional and discount produce (46 per cent vs 30 per cent).
Intention to shop at lower cost stores more in the year ahead has also risen (40 per cent vs 27 per cent), as has using retailer loyalty schemes more to unlock lower prices – with 40 per cent of consumers saying they will do more of this in 2024, compared to 18 per cent saying so twelve months ago.
The findings also show that two-thirds of consumers say they will have to cut their non-essential spending in 2024, with eating out (78 per cent), takeaways (70 per cent) and clothing (57 per cent) the top three of a wide range of cost cutting targets.
This is the same top three as when KPMG polled consumers on their 2023 spending intention 12 months ago. But the numbers of consumers saying they will target these categories for cutbacks in 2024 has risen sharply compared to a year ago, when eating out was selected by 46 per cent, takeaways by 42 per cent, and clothing by 42 per cent.
Commenting on the findings, Linda Ellett, UK head of consumer, retail and leisure for KPMG, said, “As was the case in 2023, large numbers of consumers tell us that they are going to combine stopping, reducing, and switching the things they buy to save money in 2024.
“As more households are exposed to higher mortgage rates or rent, the number of people needing to cut non-essential costs increases. Our survey also indicates that those consumers who have already adapted their shopping behaviour to lower their costs during 2023 are going to continue these steps during the next twelve months.
“Around half of consumers we survey say they will buy more value, own brand, promotional, or discount produce. Forty percent of consumers also intend to use retailer loyalty schemes more in 2024
“Price is way out ahead as the main purchasing driver and retailers are going to be expected to continue to incentivise to compete. With margins under prolonged pressure and interest rates remaining elevated, this consumer and economic landscape will continue to challenge the structure of some businesses.”
Consumers are also aiming, where possible, to switch goods and services to save further money. The top six categories for consumer switches are:
- Eating out: 27 per cent (highest among 25-34-year-olds)
- Clothing: 27 per cent (highest among 18-24-year-olds)
- Frozen food: 25 per cent (highest among 45-54-year-olds)
- Fresh food: 21 per cent (highest among 25-34-year-olds)
- Takeaways: 21 per cent (highest among 18-24-year-olds)
- Insurance cover: 18 per cent (highest among those aged 65+)
