Consumer sentiment has suffered its sharpest quarterly decline in four years, amid widespread concerns around household finances, states the latest PwC report released today (May 11), calling on food retailers to offer ranges at different price points to help shoppers economise, while retaining premium own label ranges to allow shoppers affordable treats
Consumer confidence in the UK has dipped over the last three months at the fastest rate since June 2022, when inflation in the UK was soaring as a result of Russia’s invasion of Ukraine and the spike in commodity prices.
According to PwC Consumer Sentiment Survey - Spring 2026, sentiment among UK consumers has tumbled to its lowest level since the nation was in a recession in September 2023.
Dropping from –1 to –13, it is also the sharpest quarterly decline in sentiment since the onset of the Ukraine war four years ago. The decline reverses the cautious improvements in consumer sentiment seen over the last year and returns sentiment to its longer-term average of around –10 to –15.
Food prices, which are already on the rise, typically have the biggest influence on cost of living perceptions, and are expected to climb further.
The report states, "Our Index, based on a survey of more than 2,000 UK adults conducted after the Easter Bank Holiday in April, shows consumer sentiment has fallen across all age groups. Older groups, along with those less affluent, seem to be better insulated against recent events, perhaps due to April’s benefit rises and triple-lock pension uprating.
"However, all groups remain concerned and the speed of the decline in sentiment across the board signals sentiment is likely to weaken further as the full impact of higher food and energy costs is realised. In contrast to previous cost of living shocks, the gap between more and less affluent households has narrowed, while the gap between the young and old has widened."
Retailers and grocers should look to appeal to loyal shoppers who are cutting back or trading down, to discourage them from switching retailers.
They need to offer ranges at different price points to help shoppers economise, while retaining premium own label ranges to allow shoppers affordable treats. They can also use personalisation and targeted promotions to make shoppers feel special and to reward loyalty.
Jacqueline Windsor, UK Head of Retail, PwC UK, states, “The fall in consumer sentiment gives retailers pause for thought. While the first quarter and first half of the year tend to be the low season for many, the prospect of a Golden Quarter with higher inflation will feel like the eye of the storm.
"Retailers will need to continue to position on value – ensuring they have a range of products for those who plan to trade down, as well as catering for those who are going to protect their spending in areas like fashion, health, and beauty.”
Rising costs loom large for every age group, with nine of out 10 consumers naming cost of living as their biggest concern. The research has found that for almost three quarters of consumers these concerns will have a direct impact on their spending or saving plans for the year ahead.
Every age group feels less financially “healthy” than in the previous quarter, revealing they don’t have any money left for luxuries or savings once they’ve paid for basics. Concerns around the cost of everyday things have risen across the board – these concerns were climbing in the previous quarter but have heightened in the wake of the Middle East conflict.
Younger people have seen the sharpest deterioration in perception of household finances, alongside rising anxiety around job security and housing costs. Among 25-34-year-olds there is a marked movement away from a post-election bounce of feeling financially “healthy” towards “struggling” or “in trouble”.
Rising concerns around household finances has prompted a notable uptick in the number of people planning to cut back or change their spending habits. Eight out of 10 are planning short-term cutbacks, up from seven out of 10 in the previous quarter – a figure which had remained broadly unchanged since the start of the decade.