Survey highlights impact of rising cost of living on consumer spending
KPMG release new consumer research
KPMG release new consumer research
- A third of consumers are buying less so far in 2022.
- Clothing is the most common cost cutting target, followed by eating out.
- On average, consumers expect to spend £82.80 more each month on bills and taxes.
- A third of consumers with savings are using them to offset their cost of living.
- Two thirds of consumers with savings still plan to spend on things they want in 2022 – with a holiday the most common big-ticket purchase.
- Rising costs are 4x greater a deterrent to spending savings than pandemic uncertainty.
- Value for money is the main purchasing consideration for consumers in 2022.
As consumers across the country next week assess their payslip against the cost of energy, taxes and goods, new research released by KPMG shows the impact that rising monthly costs are having, and not having, on consumer spending so far in 2022.
With the cost of living squeeze tightening, KPMG asked 3000 consumers about their 2022 purchasing and their spending intentions for the rest of the year.
- 31% said they have been buying LESS of the things they want so far this year.
- 43% said they have been buying about the SAME amount as in 2021.
- 17% said they have been buying MORE of the things they want so far this year.
- The rest weren’t sure.
Of the third of consumers that have been buying less, the majority said it was due to them having less money as costs rise.
As this group look for ways to balance their budget, clothing (67%, rising to 75% amongst women) and eating out (65%) are the most common targets for cost cutting. Other savings are being made on:
- Takeaways: 56%.
- Food and drink shopping: 51%.
- Experiences (such as Cinema): 47%.
- Holiday (lower price or delaying): 39%.
- Beauty products or services: 34%.
- Transport / vehicle use: 31%.
- Subscriptions (such as TV or gift boxes): 26%.
- Fitness (such as gym or sports clubs): 18%.
Rising costs of goods and services, and higher household bills and taxes, are the biggest deterrents to spending savings in 2022 for those who have some. On average, from April, those polled expect to have to spend £82.80 more each month on bills and taxes.
.One third of all consumers with savings are having to spend them to help meet the higher cost of living. But the remaining majority with savings still plan on spending some in 2022 on the things they want:
- 26% said they will spend 1-10% of their savings in 2022.
- 22% said they will spend 11-25%.
- 10% said they will spend 26-50%.
- 3% said they will spend 51-75%.
- 1% said they will spend 76-100%.
- 20% said they will spend none.
- 18% haven’t got savings.
Those planning to spend savings intend to buy the following big ticket items:
- 38% said on a holiday.
- 32% said on home improvements.
- 22% said on a car.
- 21% said on home appliances/home electronics.
- 19% said on a home.
- 1% said other.
- 28% don’t plan to purchase big ticket items with savings this year.
Commenting on the findings, Linda Ellett, UK Head of Consumer Markets, Retail and Leisure at KPMG, said: “So far in 2022, the cost-of-living squeeze has caused a third of the consumers we surveyed to cut back spending on the things they want, and offset their bills by dipping into their savings, where possible.
“The majority of consumers haven’t yet had to take action, as the cost of living rises are yet to fully bite. Spending intention amongst this group remains relatively strong, despite the wider landscape. A key question for the UK economy for the remainder of 2022 is as costs continue to rise, how many of this group will remain able and willing to spend?”
KPMG economists forecast a slowdown in annual consumption growth, from 6.2% in 2021, to 4.3% in 2022 and 0.5% in 2023. Lower-income households are particularly vulnerable to this year’s rise in utility costs. Households at the bottom end of the income distribution potentially stand to lose more than 8% of their total disposable income during this year from the combined April and October 2022 energy price cap increases.
For further information please contact:
Media Relations Manager (Consumer Markets), KPMG
E: firstname.lastname@example.org , T: 07510 376635.
KPMG worked with One Poll to survey 3000 UK consumers between April 8 and April 14 2022.
Consumers were asked:
Do you feel more secure in your financial circumstances now than in January (2022), or less?
- 26% feel more secure
- 38% said no more or less secure.
- 34% said less secure.
- 2% preferred not to say.
So far in 2022, have you?
- Been buying more of the things I want: 17%
- Buying about the same as in 2021: 43%
- Been buying less of the things I want: 31%
- Not sure: 10%
If you have been buying less, is this because (select all that apply)
- I have less money as things are costing more: 74%.
- I am trying to reduce the amount I consume: 45%.
- I am saving money for the future: 26%.
- I have had a change in my life circumstances: 12%.
- Other: 1%.
If you have been buying less, what are you cutting back on? (select all that apply)
- 67% clothing
- 65% eating out
- 56% takeaways
- 51% weekly food and drink shopping
- 47% experiences (cinema, theatre, for example)
- 39% holiday (lower price or delaying, for example)
- 34% beauty products and services
- 31% vehicle/transport usage
- 26% subscriptions (such as TV or gift boxes)
- 18% fitness (gym, sports clubs, for example)
- 3% other
How much more each month, on average, do you think you will be spending on higher bills and taxes from April 2022 onwards compared to the average month before this time?
- Nothing: 1%
- Up to £10: 2%
- £11-25: 8%
- £26-50: 16%
- £51-75: 14%
- £76-100: 13%
- £101-150: 11%
- £151-200: 6%
- £201-250: 3%
- £251 or more: 2%
- Don’t know / don’t want to say: 17%
- Not responsible for this in household: 8%
What is your biggest deterrent to spending savings on the things you want in 2022?
- Price of goods and services rising: 28%
- Higher taxes and household bills: 27%
- Limited savings: 12%
- Pandemic uncertainty: 6%
- Job insecurity: 6%
- Other: 2%
- No deterrent: 18%
If you have savings, are you having to spend them to meet the higher cost of living?
- Yes: 30%
- No (even though I’m impacted by this): 46%
- No (not affected enough that I need to do this): 24%
What proportion of your savings will you spend on the things you want in 2022?
- None: 20%
- 1-10%: 26%
- 11-25%: 22%
- 26-50%: 10%
- 51-75%: 3%
- 76-100%: 1%
- Haven’t managed to save: 18%
If you plan on spending savings, in 2022 will you use them to purchase 'big ticket' items such as?
- A holiday: 38%
- Home improvements: 32%
- A car: 22%
- Home appliances/home electronics: 21%
- A home: 19%
- Other: 1%
- Don’t plan to purchase big ticket items with my savings: 28%
So far in 2022, irrespective of where you started your journey, have you made the majority of your actual purchases?
- In-store: 22%
- Online: 31%
- Equally both: 37%
- Not sure: 10%
So far in 2022, what are your top considerations when purchasing goods and services? Select up to three
- Value for money: 72%
- Quality: 59%
- Convenience: 30%
- Sustainability: 23%
- Customer experience: 16%
- Ethics: 11%
- Data Privacy: 10%
- Other: 2%
- Not sure / nothing: 6%
So far in 2022, has environmental sustainability been more or less of a consideration in your purchasing than in 2021?
- More: 21%
- No change: 63%
- Less: 8%
- Not sure: 8%
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