UK consumer confidence has fallen, with rising concern about household utilities costs a key factor, according to KPMG UK’s quarterly Consumer Pulse.

Grocery prices & utility bills top consumer concerns

Surveying 3,000 UK consumers, macroeconomic concerns remained rife, with confidence in the UK economy falling by -4 percentage points compared to the last quarter. Over six in ten (62%) said the sate of the the UK economy is worsening, and just 10% said the economic outlook was improving.

Across all age groups, grocery prices remain the number one concern for 85%, followed closely by worries about spiralling utility costs, which jumped +9 percentage points to 84% versus last quarter.  

“Considering the backdrop of the ongoing conflict in the Middle East, and the actual and potential impact on energy and grocery prices, it is not a surprise that we are seeing heightened consumer concern about the economic health of the UK,” commented Linda Ellett, Head of Consumer, Retail and Leisure for KPMG UK.

Fragile confidence delays big ticket buys

Half of people (49%) who think the economy is worsening report cutting spending as a consequence, with 40% deferring big ticket purchases, up from 34% three months ago. 

“While there are relatively healthy signs of day to day spending activity so far this year, a growing number of people say they are deferring larger item spending due to their concern about the economy,” Ellett added. 

Price remains top purchasing consideration

Price remains the number one purchasing driver for everyday items, rising (to 71%) to a level not seen for a year. 

Price savvy consumers reported increases in using loyalty schemes to access lower prices (up +2 percentage points Q-on-Q, as well as buying more value or own-brand goods (+2%).

“The cautious consumer landscape continues, with essential cost levels and economic concern driving an increased focus on price and promotions.  Loyalty scheme use and own brand buying continues to grow, [as] brands are having to compete in a landscape of squeezed consumer budgets and rising business costs,” said Ellett.