Spending habits
Navigating consumer cutbacks
As households begin to feel a modest improvement in financial well-being, the way consumers approach spending is evolving. While more individuals are finding room in their budgets at the end of each month, the lingering effects of recent economic uncertainty continue to influence attitudes toward discretionary spending.
In our previous consumer outlook, over one-third of people (35%) reported having no money left at the end of the month after covering essential costs. This figure has now decreased to 28%.
Despite this positive shift, consumers remain cautious. While there is a sense of optimism, it has yet to fully translate into increased spending. Instead, today’s consumers are characterised by a more deliberate and thoughtful approach to their purchases.
Eating and drinking out, takeaways, and clothing are key categories where many intend to cut back, reflecting a broader focus on mindful spending.
Categories where consumers will cut back on in the next three months
Consumers are holding firm on essentials for their loved ones. From pet care to baby products, they are less willing to compromise on spend.
of Gen X consumers plan to cut back on dining and drinking out, leading the trend in cautious spending.
Driving forces behind consumer spending
This year, consumer spending will be influenced by real wage growth, interest rates coming down, and inflation stabilising. While affordability remains a top priority, the demand for quality will also drive decision-making. This shift will force brands to deliver on both affordability and excellence to meet evolving consumer demands.
When considering a new purchase of something that you buy regularly (that is not food), how important to you are each of the following?
Average score out of 10
Gen Z emerged as the only generation to prioritise a trusted brand over free delivery, highlighting the growing importance of brand trust in their purchasing decisions
