British consumers are proving remarkably resilient in their day-to-day spending habits despite a darkening economic outlook, according to new data from KPMG UK.
While more people than ever believe the UK economy is worsening, largely due to soaring grocery and energy bills, many are still finding room in their budgets for restaurant meals, takeaways, and holiday bookings.
KPMG’s latest quarterly Consumer Pulse survey of 3,000 UK adults, conducted between 5 -16 March reveals a tale of two mindsets. Caution on big-picture finances paired with stubborn enjoyment of life’s smaller pleasures.
Economic pessimism on the rise
Confidence in the UK economy has slipped further, with 62% of respondents now saying it is worsening, up from 58% in the previous quarter. Only 10% believe it is improving.
Grocery costs remain the top culprit cited by those feeling gloomy, named by 85% of respondents. Close behind is household utilities, which jumped sharply to 84% (from 75% last quarter), fuelled in part by ongoing global tensions in the Middle East and their ripple effects on energy prices.
“Considering the backdrop of the ongoing conflict in the Middle East, and the actual and potential impact on energy and grocery prices, it is not a surprise that we are seeing heightened consumer concern about the economic health of the UK,” said Linda Ellett, Head of Consumer, Retail and Leisure at KPMG UK.
Half of those who see the economy deteriorating (50%) said they are reducing monthly spending on everyday items as a result, while 40% are deferring big-ticket purchases – up from 34% three months ago.
Eating out and holidays
Not all discretionary spending is being reined in. Day-to-day “experiences” spending has shown surprising strength through the first quarter of 2026 (covering December to February).
- 59% of respondents said they had eaten out at a restaurant so far this year.
- 47% had ordered takeaway.
- 39% had been out for an alcoholic drink.
- 34% had booked a holiday, making it one of the most common big-ticket spends (ahead of cinema visits, gym classes, or theatre trips).
Spending on eating out and takeaways actually increased compared to the previous quarter.
For many, holidays and social outings appear to be a priority even as budgets tighten elsewhere. A fifth (22%) of those polled had made a holiday-related big-ticket spend in the quarter, though nearly half (47%) had yet to commit to any major purchase in 2026.
“The cautious consumer landscape continues, with essential cost levels and economic concern driving an increased focus on price and promotions,” Ellett said.
Larger discretionary spend is being prioritised toward holidays and experiences, but there are still relatively healthy signs so far this year of day-to-day spending activity – albeit consumer, retail and leisure brands are having to compete in a landscape of squeezed consumer budgets and rising business costs.”
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