Consumer confidence has plunged to a record low with cutbacks across all areas, including leisure spending, new data reveals.
Sentiment dropped to a historically low of minus 20% in the third quarter of the year, twice as low as the same period in 2021.
Spending power also remains “significantly strained” with indications of a further reduction over the Christmas period.
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Overall consumer confidence fell to its lowest level since Deloitte began its consumer tracker in 2011.
The latest Deloitte consumer tracker is based on responses from 3,226 adults between September 17 and 18.
The study found that consumers are cutting back across all areas, with 30% spending less, up from 21% at the start of the year. Of these, 58% said they are spending less specifically to save money.
Two in five (39%) said they were reducing spend on going out and leisure activities.
Consumers indicated that they will spend even less on leisure in the final three months of the year with intended net spend down across every leisure category, at a time when 59% of consumers believe they will have less money to spend for the Christmas period.
While travel and holidays are not specifically mentioned, the report highlighted that sentiment on the state of the economy remains low, at minus 80% – nearing levels seen at the start of the Covid-19 pandemic.
Deloitte consumer insight lead Celine Fenech said: “Consumers are making conscious efforts to cut-back on all spending.
“With rising food prices and personal finances coming under further pressure from higher energy bills, we are seeing a contraction in consumer demand.”
Efforts to combat rising costs include 57% who are reducing their home energy consumption, 40% who are spending less on clothes and shoes and 22% who have ended, or intend to end, an entertainment subscription.
Hospitality and leisure partner Simon Oaten added: “The hospitality industry has been one of the hardest-hit in recent years. As consumers assess their budgets amidst rising costs, many are having to prioritise the essentials, directing spend away from discretionary categories, including leisure.
“Many hospitality businesses are already feeling the effects of lower footfall, whilst also having to counteract rising running costs themselves.”
Deloitte chief economist Ian Stewart said: “High inflation has driven consumer sentiment sharply lower this year despite a red hot labour market. Now consumers are starting to worry about the outlook for jobs. With inflation elevated, interest rates on the rise and the labour market starting to cool the squeeze on spending is likely to intensify.”
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