This article is provided by BRC Associate Member Grant Thornton.
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Households set to be £2300 worse off at the end of the financial year.
With partners at Retail Economics, Grant Thornton asked 2,000 adult consumers in the UK about their spending priorities and plans.
Download The Cut Back Economy 2023 report
Our latest report shows that more middle and higher-income households are being drawn into this cost of living crisis as savings dwindle and mortgage rate rises bite.
The report identifies the opportunities and risks you need to understand to navigate the cut back economy and maintain a competitive advantage in 2023 and beyond.
Key stats
- Inflation has eroded £65 billion from household incomes
- The average household will be £2,300 worse off by the end of this financial year
- 88% of shoppers plan to cut back their spending to April 2024
Into its second year, the cut back economy continues shaping consumer behaviour and casting formidable challenges upon retail, leisure, travel and hospitality businesses.
This report explains the evolving macro-environment and the transformative shifts in consumer behaviour that are reshaping the customer journey across these sectors.
What you need to know
- The £54 billion online shopping boost during the pandemic has proved temporary, with normal trends now resuming
- Over half (54%) of UK consumers are cutting back on discretionary purchases, up slightly on last year (48%)
- One-in-three consumers have changed where they shop for regular purchases, switching to cheaper brands or retailers
Do you intend to cut back this year due to the rising cost of living?
Source: Retail Economics, Grant Thornton
The report shows that 69% of consumers are spending more time browsing and researching to find the best deals. Value for money has never been more front of mind. Whether that’s in resilient categories like grocery or in challenged sectors like hospitality – consumers are spending but looking for greater value when they do.
Financial resilience and strategies for success
In turbulent times, collaboration and strategic alliances often play a critical role in driving growth. Exploring merger and acquisition opportunities, forging strategic partnerships, and investing in innovative solutions can enable businesses to access new markets, diversify offerings, and deliver competitive advantages.
Consumer behaviour adaption: have you done any of the following in response to the increased cost of living?
Source: Retail Economics, Grant Thornton
How will access to capital be for consumer businesses over the next year?