Cost of living crisis bargain hunt shopping 'here to stay'

Brand owners banking on a return to the days when consumers would pay “top dollar” for products and services could be in for a long wait, with the vast majority of Brits saying that buying behaviours that have become more prevalent during the cost of living crisis are here to stay.

KPMG UK’s Consumer Pulse survey gauged the quarterly confidence and buying behaviour of 3,000 UK consumers across regions, ages and income groups during September.

As with many surveys, most of the changes to buying behaviour that have been increased by the cost of living crisis are again prevalent – including a quarter of consumers saying they have shopped at lower cost retailers more this year compared to last, and a third saying that they have increased their own brand, value and loyalty goods buying as 2024 has progressed.

However, when quizzed over what would happen if and when their household costs ease, increasing their discretionary spending budget, less than one in ten consumers said they would buy less own brand/value produce (9%); shop less at discounter/lower price stores (9%); buy less promotional/discounted goods (6%); and use retailer loyalty schemes less (6%).

Two-thirds of consumers said that they would save any extra funds, while 14% said they would buy more sustainable or ethical produce, and 12% said they would increase their branded goods buying.

So far this year, household essential cost levels have led half of consumers to cut their non-essential spending. The majority of the rest of consumers polled reported spending at the same level as when 2023 ended.

Buying at lower cost is also likely a key factor that is driving a fifth of consumers to say that they have bought more pre-owned goods so far this year.

The popularity of the “circular economy” doubles (to 33%) among those aged 18 to 24, and across all age groups, women are twice as likely to say they are buying more pre-owned goods this year than men.

Among those spending disposable income, travel is the most common way that consumers say they have treated themselves so far this year, and the most popular choice for big ticket spending in the remainder of the year. A third of consumers report having taken a holiday in 2024.

KPMG UK head of consumer, retail and leisure Linda Ellett said: “As household cost pressures have ramped up, many consumers have been forced to adapt their budget – cutting discretionary spending and finding savings on their essential costs where possible.

“Market share for lower price retailers has grown, as has the amount of people trading down to own brand and value goods, and actively searching for offers.

“Many consumers have taken cost-cutting steps to balance their budget and are now maintaining that, but as thousands of householders come out of their mortgage fix and have to enter higher-cost deals, consumers are still cutting spend elsewhere in order to adjust. This is reflected in half of consumers telling us that they’ve cut non-essential spend so far this year, and one in three saying they are using even more cost-cutting tactics when shopping.

“Many of these behaviours when shopping are so instilled now in many of us, that even when posed with the scenario that essential costs ease, providing more cash in the pocket, few would reduce their cost-cutting buying behaviours. Consumers instead are far more likely to save any extra cash.

“This landscape of heightened price-point buying, promotional demand, and increased savings volumes continues to pose a variety of questions for retailers and for the economy generally regarding whether spending taps will be turned beyond a gradual drip.”