British households cutting costs at two year high
An increasing number of Britons have sought to change spending habits in order to cut down on household expenses over the second quarter of the year, citing a weaker pound as the main motivator behind the tightening of purse strings.
A full 53% of UK consumers admitted they had employed cost-cutting exercises in the months leading up to 30 June, the highest level in almost two years and a stark contrast to the all-time low of 40% recorded in the immediate wake of the Brexit vote last year.
"The pound's weakness against both the dollar and the euro is finally feeding through to shop prices, which means real inflation is running at over 2.5%," said Steve Smith, managing director of Nielsen UK and Ireland, which conducted the survey.
"In turn, this remains ahead of general wage growth and consequently, real household disposable income is being squeezed."
Of those polled, 30% said switching to cheaper grocery brands was the preferred method of saving, and 27% admitted to cutting down on gas and electricity usage in order to lower bills.
A significantly lower 13% said they were willing to cut down on or purchase cheaper alcohol brands.
Consumer confidence fell from 106 at the end of last year to 99 at the midway point of 2017, while still remaining higher than the European average of 85, it marks a significant drop from Britain's second place ranking in June 2016 to being ninth overall a year later.
"Shopping behaviours are changing in a way that is reminiscent of the aftermath of the financial crisis in 2008/9," notes Smith. "Shoppers are well trained to use their household grocery budgets as a way to manage overall household costs, particularly as the desire to treat themselves remains. This is shown by the fact relatively fewer people are willing to sacrifice entertainment, holidays, and take-away meals."