Nearly half of Scottish consumers say they have cut non-essential spending so far in 2024

Linda Ellett, UK Head of Consumer, Retail and Leisure for KPMG,

Nearly half of consumers (49%) in Scotland say they have cut non-essential spending in the first quarter of the year, according to new research from KPMG UK.

KPMG UK’s Consumer Pulse survey tracks the quarterly confidence and spending behaviour of 3000 consumers across age and income groups and UK regions, of which 281 or 9% were in Scotland.

When asked what they would most likely do should prices of goods and services drop:

47% said put the money into savings
17% said put the money toward essential costs (mortgage/rent, energy, fuel, food)
14% said increase non-essential spending
14% weren’t sure. And 8% said none of the above
Non-essential spending was also brought into focus elsewhere in the research when consumers were asked about their spending so far in 2024. Nearly half of Scottish respondents said that their essential cost levels have meant that they have had to cut their non-essential spend in the first quarter of the year. Eating out (70%), clothing (57%), and takeaways (59%) were the three most common non-essential cutbacks reported.

Responding to the findings, Linda Ellett, UK Head of Consumer, Retail and Leisure for KPMG, said:

“Essential costs remain at a level where nearly half of the consumers we surveyed said they have cut their non-essential spend in the first quarter of the year in Scotland.

“Should macroeconomic conditions lead to an easing of pressure on household budgets, then four times more consumers say they would boost or replenish their savings, rather than spend more on non-essentials. If true, it raises significant questions about whether taming inflation leads to a consumer spending boom, or just a rebuilding of savings balances that some consumers have used to offset, or totally pay for, the higher cost of essentials over recent years.”

Despite nearly half of consumers having cut their non-essential spend, the research showed the ways in which people are still managing to treat themselves so far in 2024. Chocolate, desserts or sweets at home were the most common outlet (for a quarter of people), while a coffee when out and about is second (for a quarter of people). Having a takeaway at home is still the third most common way people are treating themselves.

Linda Ellett added: “Nearly half of the consumers we surveyed say they have reduced their non-essential spend since 2024 began, with sizeable groups of consumers also taking a variety of steps when shopping to save money – ranging from more own-brand buying, to promo, pre-used, and brand switches.

“A third of people say they have used loyalty schemes more so far this year – which is little surprise, as shoppers search for best prices. It’s also a reflection of the hard work that retailers have put into being competitive on pricing, despite their own cost pressures. The grocery sector’s loyalty focus is reflected in consumers most commonly saying grocery is the area of the economy they feel most valued by. Price and loyalty benefit continue to drive custom and are a clear indication of the importance of retailers continuing to offer promotions where possible.”

However, the data did show that 77% of people surveyed in Scotland are not currently having to dip into savings to meet household essential costs, with 33% saying they are set to use that cash for a holiday this year instead.

Survey Responses:

3000 consumers of varying ages, regions and income groups were polled for KPMG UK by One Poll from March 13 to 19.  One Poll are members of the British Polling Council.  Questions posed were as follows:

How are your essential costs (e.g., mortgage/rent, energy, fuel, food) affecting the rest of your spending so far in 2024, compared to when 2023 ended?

  • I have been able to increase my non-essential spending: 3%
  • My non-essential spending levels remain the same: 41%
  • I have had to cut back my non-essential spending: 52%
  • Not sure: 3%

To 1560 people who selected cut-back spending: Since 2024 began, which of the following non-essential spends have you reduced your spending on? [Select all that apply]

  • Eating out: 72%
  • Clothing: 62%
  • Takeaway: 58%
  • Leisure Travel / Holiday(s): 44%
  • Food and drink shopping: 44%
  • Home improvements: 37%
  • Experiences: 36%
  • Beauty products and services: 34%
  • TV or music streaming services: 27%
  • Technology: 23%
  • Fitness and exercise: 16%
  • Non-commuting vehicle/transport use: 16%
  • Meal delivery kits: 14%
  • Children’s clothing and toys: 10%
  • Pet products: 8%
  • None of the above: 1%

Which, if any, of the following have you done more of when shopping so far in 2024, compared to 2023? [Select all that apply]

  • Buying own brand / value products: 38%
  • Buying promotional or discounted items: 37%
  • Making use of retailer loyalty schemes to get lower prices: 36%
  • Buying fewer items: 35%
  • Buying lower price branded produce: 34%
  • Shopping at less expensive retailers: 27%
  • Shopping at multiple stores to find products at their lowest cost: 26%
  • Buying pre-owned items: 18%
  • Cancelling monthly subscriptions: 17%
  • Use savings when making purchases: 16%
  • Switch products due to quantity shrinking but price remaining the same (shrinkflation): 15%
  • Shopping in-store rather than online: 14%
  • Use credit card(s) when making purchases: 14%
  • Shopping online rather than in-store: 12%
  • Choosing lower cost monthly subscriptions: 9%
  • Use buy now pay later when making purchases: 8%
  • Buying products or services due to their sustainable or ethical credentials: 6%
  • None of the above: 19%

Have you switched to a cheaper brand in any of the following categories so far in 2024 to save money? [Select all that apply]

  • Frozen food: 24%
  • Fresh produce (fruit, vegetables, meat, bread, dairy): 22%
  • Clothing: 17%
  • Eating Out: 14%
  • Non-perishables: 13%
  • Alcohol: 12%
  • Insurance cover: 11%
  • Beauty products & services: 11%
  • Mobile phone contract: 9%
  • Takeaways: 9%
  • Broadband provider: 7%
  • TV & music streaming services: 7%
  • Travel/Holiday: 7%
  • Pet products: 7%
  • Energy provider: 6%
  • Satellite or cable TV provider: 6%
  • Home improvements: 5%
  • Children’s clothes & toys: 4%
  • Technology: 4%
  • Fitness & exercise: 4%
  • Vehicle: 3%
  • Meal delivery kits: 3%
  • Other: 1%
  • None of the above: 37%

So far this year, what are the most common ways in which you have ‘treated yourself’? [Select up to five]

  • Chocolate, dessert or sweets at home: 31%
  • A coffee out: 25%
  • Takeaway at home: 25%
  • Sit-down meal out: 24%
  • Alcoholic drink at home: 24%
  • Holiday / weekend break: 18%
  • Alcoholic drink out: 15%
  • Clothing and footwear: 15%
  • Fast food: 14%
  • Out of home entertainment (e.g., cinema, gig, theatre, etc.): 13%
  • N/A – I have not been able to treat myself so far this year: 10%
  • Make-up or skin care: 9%
  • Premium range meal at home: 8%
  • Beauty services (e.g., manicure, massage, etc.): 8%
  • Toiletries: 6%
  • Jewellery and accessories: 4%
  • None of the above: 5%

Have you bought any of the following ‘big ticket’ items so far in 2024? [Select all that apply]

  • Holiday(s) (including booked but not yet taken): 25%
  • Home improvements (e.g., redecorated): 10%
  • Home appliances (e.g., fridge): 10%
  • Personal technology (e.g., mobile phone, laptop): 9%
  • A petrol or diesel vehicle: 6%
  • Home electronics (e.g., TV): 6%
  • A battery electric vehicle: 3%
  • A home: 3%
  • None of the above: 54%

How much money do you have available to you in savings, equivalent to your monthly income? [Select best match]

  • ‘Less than a month’s income: 13%
  • ‘1-3 months’ income: 16%
  • ‘3-6 months’ income: 15%
  • ‘6-12 month’s income: 9%
  • ‘Over 12 months’ income: 25%
  • ‘N/A – I don’t have any savings: 8%
  • ‘Prefer not to say: 13%

To 2754 people with savings: Are you currently having to use your savings to help meet your essential household costs (e.g., food, energy, fuel, mortgage/rent)?

  • Yes: 26%
  • No: 74%

To 2754 people with savings: Which, if any, of the following do you plan on spending savings on in the rest of 2024? [Select all that apply]

  • Holiday(s): 35%
  • Home improvements: 24%
  • Paying essential household costs (e.g., food, energy, fuel, mortgage/rent): 16%
  • Home appliances: 7%
  • Technology (such as mobile phone): 7%
  • Moving home: 6%
  • A petrol or diesel vehicle: 6%
  • Paying down the existing mortgage: 6%
  • Home electronics: 5%
  • A battery electric vehicle: 3%
  • Not sure: 13%
  • N/A – I don’t plan to spend any of my savings in 2024: 23%

What is your biggest deterrent to spending more on non-essential goods and services in the next three months? [Select one]

  • Utilities (gas, electricity, water) costs: 24%
  • Food and drink cost: 12%
  • No savings: 8%
  • Current mortgage cost: 6%
  • Current rent cost: 5%
  • Saving for higher mortgage cost when fixed term deal ends: 3%
  • Saving in case of further rent increases: 3%
  • Transport/vehicle cost: 3%
  • Childcare cost: 2%
  • None of the above: 33%

So far in 2024, what has been your top consideration when purchasing goods and services? [Select one]

  • Price: 58%
  • Quality: 19%
  • Convenience: 4%
  • Loyalty benefits: 4%
  • Environmental sustainability: 3%
  • Customer experience: 2%
  • Data privacy: 1%
  • Other ethical considerations: 1%
  • Other: 1%
  • Not sure: 7%

Other than price, what have been your top considerations when purchasing goods and services so far in 2024? [Select up to three]

  • Quality: 66%
  • Convenience: 39%
  • Loyalty benefits: 30%
  • Customer experience: 18%
  • Environmental sustainability: 15%
  • Data privacy: 6%
  • Other ethical considerations: 6%
  • Other: 2%
  • Not sure: 8%

If prices of the goods and services that you currently buy were to decrease as inflation drops, which, if any, of the following would you be most likely to do? [Select one]

  • Put the money into savings: 47%
  • Put any money saved towards essential costs: 20%
  • Increase your non-essential spending: 11%
  • None of the above: 8%
  • Not sure: 14%

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