NEW research reveals how Scots are handling the continuing cost of living crisis with the biggest trend a shift toward buying more discounted items and bargain hunting.
The scale of households cutbacks in non-essential spending are detailed in the KPMG Consumer Pulse survey which found 46% of Scots have reduced their non-essential spending, with the cost of utilities bills cited as being their biggest barrier to spending more income or savings on discretionary items in the next three months.
And the non-essential spending being avoided is most commonly eating out (69%).
Half of consumers said they will spend less on non-essentials if not eligible for energy bills support from this month, while 37% are buying bargains, 32% taking more time to find discounted goods, 35% buying less and 30% shifting to own brand and value items in stores.
Other findings point to Scots shoppers switching brands entirely (26%) and buying from multiple stores (26%), while 9% are spending more on credit.
The new research released this week from KPMG, which provides audit and tax services to organisations, highlights the scale of reduction in consumer spending so far in 2023 and indicates how households may respond if they no longer receive energy bill support payments from April.
The Government’s Energy Bills Support Scheme provided a monthly discount of around £67 from October through to March 2023, but support will now move to being means tested.
Half of consumers surveyed by KPMG UK as part of its Consumer Pulse survey said they would cut non-essential spend, while a third would use savings to help meet energy costs, should they no longer receive bills support payments.
The same proportion of consumers said they would have also taken the same actions – had the Government not extended the energy price guarantee from April.
Linda Ellett, UK Head of Consumer Markets, Retail and Leisure for KPMG, said: “With energy, mobile, and broadband costs set to rise for many households from April, a number of consumers will likely have to further cut back their discretionary spending.
"Already in 2023, over half of the consumers that we spoke with have reduced their non-essential spend. Buying behaviour also continues to change as shoppers look to lower costs – including switching to discounters, buying more own brand and value produce, and searching out promotional prices.”
Across the UK, a third of consumers surveyed reported using their savings to help meet their essential costs. Two thirds with savings say they don’t currently need to use savings for this and the average amount of savings in the bank among the group was £7,253.
Ms Ellett added: "Appetite for major purchase spending does still exist for the rest of the year though amongst two-thirds of consumers with savings. But unlocking that spend will be dependent on whether and when essential costs stop rising.”
Overall feeling of financial security so far in 2023 is largely balanced among consumers – with 28% feeling more secure than when the year began, 28% feeling less secure, and 43% feeling the same as they did when the year began.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here