Adding to data from Barclaycard and the British Retail Consortium, Deloitte announced its Consumer Confidence Index declined by five percentage points to -17% compared to Q4 2022 and represented the Tracker’s largest fall since Q1 2020.
However, the percentage of consumers spending more on restaurants, going out, and holidays and hotels rose by nine, five, and 13 percentage points quarter-on-quarter, respectively. The increased spend is partly driven by inflation.
Rising inflation, energy bills, and interest rates combined with a fall in real incomes led to a significant deterioration of sentiment around personal finances and overall consumer confidence. Of consumers spending less, one in two are buying fewer goods and services while a third are choosing cheaper brands or stores.
The tracker forecasts the lifting of remaining Covid-19 restrictions will continue to drive consumer spending in the hospitality sector, with growth in spending in both essential and discretionary categories.
Deloitte noted that 'businesses will need to cater for all consumers whether it is serving the more affluent with continued premium offerings or helping those on lower incomes by delivering more value ranges and competitive prices'.