UK consumers can expect to spend at least £2,000 more on essentials this year as the cost-of-living crisis bites, according to the latest research.
The Cardlytics State of Spend report, based on the spending habits of over 24 million UK bank cards and the views of over 2,000 UK consumers, reveals that non-essential spending has taken a back seat as everyday costs are on the rise.
Driven by rising inflation and supply chain disruption, total UK consumer spending on essentials rose by 7% between 2020 and 2022, with the average transaction value rising 10% in this time.
Three quarters (74%) of UK consumers said they’re now spending more on day-to-day outgoings than they did a year ago, estimating their weekly spending has risen by £40 on average.
The report found that consumer spend is shifting away from the big four and towards discount supermarkets. Spending across the big four fell by 7% in the last year, while discounted supermarkets managed to uphold their market share.
READ MORE: Cost of living: Has inflation driven Brits to theft?
Hunting for bargains to keep costs down is also set to become more popular, with three quarters (73%) of consumers saying they plan to shop around more for the best deals this year, while more than half (58%) plan to use price comparison sites more frequently to find the best deals.
SVP UK advertising at Cardlytics, Lucy Whittemore, said: “As the cost of everyday essentials continues to rise… brands across all categories are caught in the middle and are faced with a difficult question – whether to pass increasing costs onto consumers or protect their bottom lines.
“The third option, however, would be for brands to invest in building brand loyalty and attracting customers at a time when they are feeling the pinch.
“By offering consumers tailored rewards, cashback and loyalty offers in the places they shop most, brands can create longer-term affinity and support their customers when they need it the most.”
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