Britons' spending habits change in face of rising energy bills
Consumer spending behaviour is shifting as energy inflation impacts them, a report from Barclaycard said on Tuesday. The payment card specialist said Britons are already saving for Christmas and are cutting back in lots of areas in order to get through the cost-of-living crisis.
Average spending on utility bills increased by 48% in September – higher than the growth seen in August (45.2%) and July (43.9%) – with nine in 10 (91%) consumers feeling concerned about the impact of rising household bills on their personal finances.
That means they’re “saying no to new clothes and meals out”. In fact 53% of consumers are planning to cut down on discretionary spending to be able to afford their energy bills this autumn and winter. Some 59% are cutting down on buying new clothes and 60% are reducing the amount they eat out at restaurants. This reining-in of money spent on socialising possibly also means the need to buy new clothes will be less urgent.
In September, spending on non-essential items grew just 1% year-on-year, significantly less than the previous month (3.6%), and a new low since February 2021 (-17.5%) when the second raft of Covid-19 lockdown measures were still in place.
And while the ‘lipstick effect’ is often cited as an upside during tough times with consumers still buying small luxuries to treat themselves, it may not be happening this time.
Barclaycard said that one of the most common ways for consumers to save is by cutting down on luxuries or one-off treats for themselves (40%). Similarly, one in five (19%) say that they’re no longer able to afford small luxuries as a pick-me-up.
As mentioned, however, many have started saving for Christmas and are still clearly prioritising the festive season, despite the tough economic backdrop.
But as many as 48% are taking precautions due to concerns about products running out of stock earlier than usual, including being more proactive with buying Christmas presents (21%).
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