One in three people with savings rate holidays as the non-essential item they are most likely to dip into their reserves to fund, according to research from KPMG.
The survey of 3,000 consumers across the UK in December found 61% plan to cut discretionary spending in 2023, with eating out, clothing and takeaways the areas most likely to be pared back.
Of the 87% of respondents who have savings, 43% said they were already having to use banked resources to meet essential costs.
When asked which non-essential item they would also consider using savings for, holiday was the most popular response (30%), followed by home improvements and home appliances.
Linda Ellett, KPMG’s UK head of consumer markets, retail and leisure, said: “Current essential costs, fears of how high they’ll rise – including concerns about mortgage rate and energy price changes next year – are all factors in why two-thirds of consumers that we surveyed said they have to reduce their non-essential spending in 2023.
“To do so, consumers are increasingly changing how they shop to save money – including switching to cheaper retailers, buying more value or promotional produce, and swapping eating out for meals in. Understanding these swaps is critical for brands and retailers looking to still be the first choice for spend.”
She added: “Ability and appetite to spend on big ticket items is limited in this climate, but spending plans do remain for holidays, home improvements and appliances.
“And we know consumers do like to treat themselves and others, so smart retailers and brands can still hold revenues if not volumes if they are targeted in their consumer appeal.”
But she warned: “Should the scale of non-essential cuts outlined in our research come to fruition, then it likely won’t be enough to stop scarring on both the high street and online in 2023.”
A separate survey of 2,000 consumers carried out by Ipsos on behalf of London North Eastern Railway (LNER) also found that leisure travel remained a priority, with 65% of those polled saying they intended to take a leisure trip within the UK in the next 12 months.
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