In April, grocery spending increased by 5.5% despite the latest ONS food price inflation rate being significantly higher at 19.2%, and smaller compared to March’s growth of 7.1%. This trend has caused worries among nearly nine out of ten shoppers (89%) about the impact of rising food prices on their household finances. An additional survey reveals that 67% of these shoppers are adopting money-saving methods to reduce the cost of their weekly shop.
Popular money-saving strategies include buying discounted products nearing expiration, or “yellow sticker” items (38%), and using vouchers or loyalty points to get money off at the checkout (37%). Furthermore, almost seven in ten consumers (69%) have started making product “swaps” to save money recently, with over a quarter (27%) opting for standard or value ranges over supermarket own-brand premium ranges. A similar proportion (24%) have started swapping fresh food for frozen food.
However, spending on fuel decreased by 9.3% due to the decline in petrol and diesel prices, particularly compared to April 2022, when prices were higher due to the Russian invasion of Ukraine. A year on from the energy price hike, Brits remain concerned (90%) about the impact of rising household bills, leading more than half (55%) to make adjustments to their discretionary spending to cope with the squeeze.
Surprisingly, spending on non-essential items saw higher year-on-year growth in April (4.6%) than in March (3.5%), despite the increased anxieties around household bills. Consumers are feeling noticeably more confident in their household finances and ability to spend on non-essential items. Optimism towards the future of the UK economy has also increased to 25%, up two percentage points from March.
According to Abbas Khan, UK economist at Barclays, household disposable incomes are being squeezed by high inflation, which is restricting consumption. However, the decline in wholesale energy prices and the price cap on household energy bills are offsetting the effects of high inflation, contributing to an improvement in consumer confidence.
Overall, these recent trends suggest that these cost-saving measures have been received positively by the UK. Consumers are becoming more adaptable to the price changes, leading to a gradual improvement of confidence in the economy.
